Debtholders Convert to Equity at a Significant Market Premiu The conversion of $39 million of debt-to-equity paves the way for The Mint Corporation’s (TSXV:MIT) growth
SmallCapPower | March 5, 2018: The Mint Corporation (TSXV:MIT; “Mint”) converts $39 million of debt-to-equity, paving the way for growth. Mint announced on March 1, 2018, that it has signed a definitive debt restructuring agreement with its debtholders to convert $39 million of debt to equity at a significant premium to the market. This comes on the back of a $3.3 million debt conversion in September 2017. These successful negotiations with debtholders highlight management’s ability to do what is necessary to ensure a healthy capital structure, while continuing to execute on the Company’s business plan.
Debt-to-equity conversion completed at $0.89/share equivalent (see chart below); approximately 200% premium to Mint’s March 2, 2018 share price. Mint’s management convinced debtholders to become shareholders and the debtholders will only generate a return if the share price trades above $0.89 per share. Mint will issue up to 45 million shares on a fully-diluted basis, which includes: 17.3 million common shares, 11.7 million warrants, and 16 million subscription receipts. In order to reduce immediate dilution, the subscription receipts will be issued in two million share increments on a quarterly basis, starting from the deal closing date. The warrants are also not exercisable until January 2019.
Remaining debt is sustainable with interest payments starting in October 2019. The remaining $20 million of debt does not start bearing interest until October 2019, after which interest can be paid for in cash or stock. We believe that based on Mint’s business plan the Company should be able to repay or refinance the debt when it comes due.