Crew Gold bondholders give go-ahead for restructuring four bond series

By Susanna Moon

Chicago, Nov. 24 - Crew Gold Corp. said bondholders approved the restructuring of four series of the company's bonds at meetings held on Tuesday.

The bonds under consideration were the 9½% unsecured bonds due 2009 with call option, 6% senior unsecured convertible bonds due 2010, 5.406% senior unsecured convertible bonds due 2010 and senior secured bonds due 2011 with call option.

The restructuring requires the following:

• Approval by Intex Resources ASA or the adoption of a plan of arrangement or other statutory procedure under Canadian or Yukon Territory law that would accomplish the restructuring;

• Resignation of two of the current five members of the company's board of directors and appointment of Robert Byford, Mitchell Gropper and Gordon Lawson as directors;

• Receipt of all required regulatory approvals, including the approval of the Toronto Stock Exchange and Oslo Bors, and;

• Completion of the restructuring by Jan. 31.

On Nov. 16, Crew Gold released more details about the agreement in principle reached with some bondholders for the conversion of about $225 million of its bonds into common shares.

Crew Gold would convert into common shares:

• 50%, or $50.8 million, of the $101.7 million of outstanding senior secured bonds due March 30, 2011;

• 80% of the outstanding unsecured debt, including $156.2 million of its $195.2 million of unsecured convertible bonds due Dec. 1, 2010 and $17.6 million of its $21.8 million of senior unsecured bonds due Oct. 27, 2009; and

• 80% of the $9.78 million amount outstanding under the loan from Intex Resources ASA.

The agreement was announced on Oct. 28. The company said on Oct. 26 that the remaining 20% of the unsecured debt and Intex loan, together with accrued interest, would be rolled into a new bond loan.

The new bonds will mature Sept. 30, 2012 and have the same security package as the senior secured bonds on a second-priority basis and otherwise the same terms and conditions as the senior secured bonds.

The new bonds will be issued in a dollar-denominated tranche and a Norwegian krone-denominated tranche so that each bondholder will hold bonds in the same currency following the restructuring as they did before.

The coupon will be 9½ % for the krone-denominated tranche and 7.3% for the dollar-denominated tranche. Interest will be payable quarterly.

The amount of each series of bonds and the Intex loan to be converted is noted in the table below as well as the percentage of the company that will be held by each class of debtholders following the restructuring.

The 50% of the senior secured bonds that remain outstanding following the restructuring will be subject to a number of amendments, including a six-month extension of their maturity date to Sept. 30, 2011 and Crew Gold's agreement to procure demand guarantees from some of its subsidiaries.

In order to facilitate the restructuring, the bondholders were asked to not take action to declare the unsecured bonds in default and to not take action to collect payment of interest on the convertibles until the earlier of (a) unless the restructuring is approved by the holders of each issue of bonds, Nov. 30 and (b) Jan. 31.

When the restructuring was announced on Oct. 28, the company anticipated that the receipt of shareholder approval would be needed. It has since been advised by the Toronto Stock exchange that this is not the case.

Crew Gold is a resource exploration company based in London.

Crew Gold debt-for-equity restructuring

Debt Amount to be converted Resulting ownership percentage

$173.78 million convertible bonds $139.03 million 56.92%

NOK 119 million convertible bonds NOK 95.2 million 6.96%

$78.08 million senior secured bonds $39.04 million 15.99%

NOK 131 million senior secured bonds NOK 65.6 million 4.79%

NOK 122 million unsecured bonds NOK 97.6 million 7.14%

$9.78 million Intex loan $7.83 million 3.2%

Existing shareholders N/A 5%

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