49 North tallies votes for upcoming meeting of 8% convertible notes

By Susanna Moon

Chicago, May 30 - 49 North Resources Inc. said it has achieved quorum for its upcoming meeting for holders of its 8% convertible unsecured subordinated debentures due June 29, 2014.

The deadline for submitting proxies is on June 4. The meeting has been set for June 6, according to a previous press release.

So far, 25.16% of holders have delivered proxies for the meeting, of which 93.74% have voted in favor, 6.09% have voted against and $5,000 principal amount has abstained from voting, according to a company press release.

For the company's 8% convertible unsecured subordinated debentures due Sept. 23, 2013, 15.35% of the holders have delivered proxies for the meeting, of which 100% have voted for the proposed amendments.

The company's board of directors encourages bondholders who have not voted their debentures to vote for the restructuring announced on April 23, the press release noted.

49 North has also received conditional acceptance from the TSX Venture Exchange for the proposed amendments.

Proposed changes

On April 23 the company announced an amended proposal to holders of 8% convertibles due 2013 and 2014 that does the following:

• Extend the maturity date of the debentures by three years;

• Forbear on the payment of any interest due in 2013, provided that the unpaid interest will be added to the principal amount to be repaid at the maturity date, as extended;

• Raise the interest rate to 9% per year from the amendment date;

• Reduce the conversion price to $1.50;

• Provide that no premium will be payable upon redemption of the debentures by 49 North after the expiration of the original term of the debentures; and

• Provide that the company will not incur any long-term debt obligations until the debentures have been retired without holder approval.

The new proposal reflects comments from debentureholders about the company's previous proposal to exchange the debentures for preferred shares of the company, according to a previous press release.

In particular, some holders advised the company they are unable to hold equity securities. In an attempt to accommodate all of its bondholders as best as possible, 49 North revised its original restructuring plan announced April 8, the release noted.

"The new proposal will ensure the necessary financial flexibility for the company to continue with is operating strategy and focus on enhancing long-term value for stakeholders," the company said.

"If the new proposal is not approved and no alternative put in place, the company may not have sufficient funds to service and retire the debentures, in which case there is a risk that the company may not be able to continue as a going concern," the company noted.

The current proposal will be considered at a joint meeting to be held on June 6.

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

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