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Bullboard - Stock Discussion Forum First Uranium Corporation T.FIU

TSX:FIU - Post Discussion

First Uranium Corporation > Initial distribution may come in 2013 IMO
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Post by AIGswap on Jun 15, 2012 2:40pm

Initial distribution may come in 2013 IMO

Double-checking the circular, I believe the initial distribution won't come until 2013.  Here's why:

 

Initial Distribution” means the amount determined by the Board of Directors following completion of the Transactions and the repayment of all current obligations to the Debentureholders, settlement of all outstanding obligations to the Noteholders and a reserve for any continuing and contingent obligations, to be distributed to the Shareholders in the form of a redemption of Class A Special Shares, which amount was estimated to be US$36.6 million as at March 2, 2012"

The definitition of Initial Distribution states that it won't get paid until the debentures are completely repaid.  3% of the consideration of the debentures will be held in escrow until Dec 31 2012, and so the complete repayment to debenture holders won't happen until then, holding back the initial distribution to shareholders until after that.

Also, on p.12 of the Backgroun section, the additional payment to the debenture holders is "an additional payment of the lesser of (i) 3% of the principal amount or (ii) the total amount released to the Corporation from the Escrows, in priority to the Initial Distribution."

The 3% debenture holdback is senior to the initial distribution to shareholders. The 3% or 4.5 million to debenture holders will come before the initial distribution to shareholders, but not before Dec 31 2012.

 

Just a word of warning to counter some overly-bullish pumpers in this board.  No position.

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