Brick tenders for C$110.14 million 12% notes with key holder support

By Susanna Moon

Chicago, March 12 - The Brick Ltd. said it began a cash tender offer for its C$110,138,000 of outstanding 12% senior secured debentures due May 30, 2014.

The company will pay C$1,140 for each C$1,000 principal amount of notes tendered by the offer expiration at 11:59 p.m. ET on April 6.

Holders also will receive accrued interest to but not including the payment date, which is expected to be the third business day after the offer ends.

The Brick expects to fund the offer with cash on hand and potentially from borrowings under its credit facility, according to a company press release.

Tendered notes may be withdrawn until the end of the offer.

"As The Brick's financial position continues to strengthen, we are pleased to offer debenture holders market liquidity, at an attractive premium. At the same time, this cash tender offer of debentures represents a key step towards reducing the financing impact of The Brick's 2009 recapitalization," Vi Konkle, the company's president and chief executive officer, said in the release.

The support agreements have been acknowledged by the company's two largest share and debenture holders, Konkle said.

The Brick entered into support agreements with a subsidiary of Fairfax Financial Holdings Ltd. and William H. Comrie, in which the companies agreed to tender their notes and consent to amendments to delete or modify many of the covenants and events of default. They will receive the same price under the offer.

In exchange, the company agreed that, for as long as any notes remain outstanding, it will not repurchase any notes at a price of more than $1,140 per $1,000 principal amount at maturity plus accrued interest.

The company must purchase the notes under the offer in order for the amendments to be become effective.

Scotia Capital Inc. (Michael Lay, 888 776-3666 or 416 863-7257) is the dealer manager for the offer. Computershare Trust Co. of Canada is the depositary. Georgeson (866 656-4118) is the information agent.

The Brick Group, based in Edmonton, Alta., is a household furniture, appliance, and electronics retailer.

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