Newport Partners moves meeting for debenture holders to March 18

New York, Feb. 18 - Newport Partners Income Fund said it has pushed back the date for the meeting of holders of its 7.5% debentures due Dec. 31, 2010 and 7% debentures due Dec. 31, 2012 to March 18 at 8:30 a.m. ET.

The meeting was previously scheduled for March 7.

The record date of Feb. 1 is unchanged.

The fund is proposing to exchange the debentures for second lien notes and subordinated unsecured notes.

The Toronto Stock Exchange has permitted the debentures due in 2010 to continue to trade after their maturity date until the meeting is held. Trades are on a flat basis.

Newport announced in November that it has executed support agreements with Marret Asset Management Inc. and K2 Associates Investment Management Inc. Together, Marret, on behalf of various funds it manages, and K2 own or control roughly 55% of the 7½% debentures and 41% of the 7% debentures.

In exchange for the debentures, the fund will issue an equal amount of new 8% five-year second-lien notes and subordinated unsecured notes.

In effect, the exchange will provide for an extension on the repayment period for amounts owed under the debentures series.

Newport said that it will also exchange accrued interest of about $24 million at Dec. 31 for the three-year unsecured notes.

As reported in June, the fund said it was in default on its C$164.5 million of subordinated unsecured convertible debentures because it did not make the C$6 million interest payment due June 30 on the debentures.

The agreements further involve the assignment to Marret and amendment of Newport Finance Corp.'s senior secured credit facility.

The new 8% notes will be guaranteed by and secured by a second lien against assets of the fund and most of its affiliates.

Newport added that the unsecured notes would be convertible on maturity at its exclusive option into a maximum of 10% of its equity.

Newport is a Toronto-based asset management investment trust.

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