Solimar Energy Limited Common Shares V.SXSH

Solimar debentureholders agree to waive default event NEWS

[snstock]

2013-08-16 20:13 ET - News Release

 

Mr. Jason Bednar reports

SOLIMAR ENERGY LIMITED: AGREEMENT WITH DEBENTUREHOLDERS

Solimar Energy Ltd. has reached an agreement with holders of debentures issued pursuant to the debenture indenture dated June 26, 2012. The principal outstanding under the debentures is $4-million.

After nearly one month of negotiations and further to the company's press releases dated July 22 and Aug. 2, 2013, the holders of debentures have agreed to waive the event of default under the debenture indenture and direct the trustee under the debenture indenture to cancel the declaration that the outstanding principal and interest owing thereunder is immediately payable, on the condition that the debenture indenture be amended and restated to provide, among other things, as follows:

 

• The interest payable on the debentures increases to 20 per cent per year effective July 1, 2013, with 16 per cent being payable on each interest payment date and the additional 4 per cent being accrued and payable upon maturity;
• The maturity date of the debentures is brought forward to Jan. 31, 2014:
  • However, at the company's option and upon the company and its subsidiaries providing the holders of debentures first-priority security on all of the company's and its subsidiaries' assets and payment of a $250,000 extension fee, payable proportionately to the holders of the debentures at the time of the extension, the maturity date may be extended to July 31, 2014;
• The company pays a loan modification fee of $500,000, payable proportionately to the holders of the debentures upon maturity;
• The company covenants to use all reasonable commercial efforts to pay, via the issuance of shares, any principal and interest owing pursuant to the debenture indenture dated Feb. 10, 2012, as amended on July 27, 2012;
• The company and its subsidiaries covenant not to incur or become responsible for, directly or indirectly, any additional indebtedness that ranks in priority to the debentures.

 

The debenture indenture was amended and restated as of Aug. 14, 2013, to reflect the foregoing conditions.

We seek Safe Harbor.