49 North gets OK at meeting to restructure 9% convertibles due 2016

By Tali Rackner

Norfolk, Va., Nov. 12 – 49 North Resources Inc. said it received approval at a meeting on Thursday to exchange the principal amount of its 9% convertible unsecured subordinated debentures due Sept. 23, 2016 for a combination of common shares, first preferred series 2 shares and a new 2.5% senior secured convertible debenture.

At the meeting, 36.69% of the total outstanding debentures were voted, and 99.42% of the votes were in favor of the exchange.

As a result, holders will receive, per C$100 principal amount of debentures plus any accrued interest, 150 common shares, 25 preferred shares and an interest in the 2.5% senior secured convertible debentures of the company created at the restructuring of the company’s former series B debentures earlier this year.

The transaction, which is subject to final acceptance from the TSX Venture Exchange, is expected to close on Nov. 30.

As previously reported, 49 North announced on Sept. 17 that as of that date, it had received indications of support from a “substantial majority” of the outstanding bonds.

The company said on Sept. 18 that the exchange is “to further secure the future of the company during this prolonged downturn in the junior resource capital market while offering the highest possible potential returns to both the existing debenture holders and other security holders of the company.”

In the most recent press release on Thursday, 49 North said it is pleased with the results of the meeting, as it will allow the company to “once again focus its efforts on day-to-day operations and the continued repositioning of the company’s assets to take advantage of a recovery in the junior resource exploration industry.”

“This restructuring, along with the restructuring of the former series B 9% convertible unsecured subordinated debentures completed in June of 2016 is a large step in ensuring the future viability of 49 North,” the release said.

The 2.5% non-voting convertible preferreds have a conversion price of C$0.50 per share and will be issued at a price of C$1.00 per preferreds. The preferreds will be redeemable at par at any time after the third anniversary of issue.

The 2.5% five-year senior debentures will have a principal amount of up to C$5 million and also will be convertible into common shares at a conversion price of C$0.50 each.

49 North needed approval from the holders of 66 2/3% of the principal amount of the debentures voted at the meeting.

The company is a Saskatoon, Sask.-based oil and gas exploration, development and production company with a resource investment portfolio and strategic operations in financial, managerial and geological advisory services and merchant banking.

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