Interesting 
Diversified Royalty Corp. Announces $50 Million Bought Deal Offering Of 5.25% Convertible Unsecured Subordinated Debentures /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ Vancouver, B.C., October 17, 2017, For Immediate Release – Diversified Royalty Corp. (TSX: DIV) (the “
Corporation”or “
DIV”) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets (the “
Underwriters”) pursuant to which the Underwriters have agreed to purchase $50,000,000 aggregate principal amount of 5.25% convertible unsecured subordinated debentures (the “
Debentures”) at a price of $1,000 per Debenture (the “
Offering”).
In addition, the Corporation has granted the Underwriters an option (“
Over-Allotment Option”) to purchase up to an additional $7,500,000 aggregate principal amount of Debentures at the offering price exercisable at any time up to 30 days following closing.
The Debentures will mature December 31, 2022 and will bear interest at an annual rate of 5.25% payable semi-annually in arrears on the last day of December and June in each year, commencing June 30, 2018. At the holder’s option, the Debentures may be converted into common shares of the Corporation (“
Common Shares”) at any time prior to the close of business on the earlier of the last business day immediately preceding December 31, 2022 and the date fixed for redemption. The conversion price will be $4.55 per Common Share (the “
Conversion Price”), subject to adjustment in certain circumstances.
The Debentures will not be redeemable on or before December 31, 2020. After December 31, 2020 and prior to December 31, 2021, the Debentures may be redeemed in whole or in part from time to time at DIV’s option, provided that the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the “
TSX”) during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price. On or after December 31, 2021 and prior to the maturity date, DIV may, at its option, redeem the Debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.
DIV intends to use the net proceeds from the Offering for general corporate purposes including to fund potential future acquisitions and working capital.
“Access to capital and financial flexibility are critical to DIV’s ability to grow and diversify its top-line royalty portfolio. These $50 million unsecured subordinated debentures will provide DIV with the capital and flexibility it needs to execute its business plan”, said Sean Morrison, President and CEO of DIV.
Closing of the Offering is expected to occur on or about November 7, 2017 and is subject to regulatory approval including that of the TSX.
The Debentures to be issued under the Offering will be offered by way of a short form prospectus in each of the provinces of Canada, except Qubec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the
United States Securities Act of 1933, as amended (the “
U.S. Securities Act”), and certain other jurisdictions.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
About Diversified Royalty Corp.