Acasta to reverse conversion of debt into shares to avert litigation

By Wendy Van Sickle

Columbus, Ohio, April 2 – Acasta Enterprises Inc. said it has decided to unwind its Feb. 22 conversion of its high-yield debt security into class B shares of the company, after two shareholders commenced court proceedings over their opposition to the conversion.

“Although the conversion had received the approval of the Toronto Stock Exchange, was effected in accordance with all applicable TSX policies and was determined by the independent board members to have been in the best interests of the company and reasonable under the circumstances, two shareholders have opposed the conversion and have commenced proceedings before the Ontario Securities Commission seeking to review the TSX’s decision in approving the conversion,” Acasta said in a news release.

“Despite the fact that the conversion would have saved the company a significant amount of interest payments during 2019, the company has been advised that the anticipated costs of a litigation over this issue would exceed these cost savings.

“In addition, during this critical phase in the company’s operational turnaround, it was determined that further management distraction over what was anticipated to have been a straightforward cost-saving matter would not be beneficial to the company or its shareholders.”

The reversal of the conversion is expected to be effective on April 5.

Toronto-based Acasta is a special-purpose acquisition corporation.

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