CanAm Coal Completes Debt to Equity Conversion of $7.6 million


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PK:COECF / TSX.V:COE
08/04/2014 [ACCESSWIRE]

Calgary, AB / ACCESSWIRE / August 4, 2014 / CanAm Coal Corp. (TSXV: COE) ("CanAm" or the "Company") is pleased to announce that it has completed its previously announced plans to convert debt into equity (the "Debt to Equity Repurchase Transaction").

On May 19, 2014, the Company announced that it had entered into binding agreements with certain holders of its 9.5% unsecured non-convertible debentures, due August 7, 2016 (the "2016 Debentures"), to repurchase, at par, an aggregate amount of approximately $7.3 million of the 2016 Debentures. On July 11, 2014, the Company provided a further update on the terms of the Debt to Equity Repurchase Transaction and announced that it had entertained discussions with additional holders of 2016 Debentures who are not related parties.

Pursuant to the closing of the Debt to Equity Repurchase Transaction, the Company repurchased $7.3 million in outstanding 2016 Debentures held by related parties (the "Insiders"). In addition, the Company repurchased $330,000 in outstanding 2016 Debentures held by certain other debentureholders (the "Other Debentureholders"). In consideration for the repurchase from the Insiders, the Company issued 121,806,667 common shares of the Company at a price of $0.06 per common share. The Other Debentureholders received 6,600,000 common shares of the Company at a price of $0.05 per common share and received 5,280,000 common share purchase warrants (the "Warrants"). Each Warrant is exercisable at a price of $0.0625 per common share for a period of two years from closing. The common shares issued in connection with the offering are subject to a four month hold period that expires on November 30, 2014. The Debt to Equity Repurchase Transaction was conducted to meet the requirements of a new covenant put in place in April 2014 by the Company's US equipment lender and by completing the Debt to Equity Repurchase Transaction described herein, the Company has satisfied such requirement.

Pursuant to the closing of the Debt to Equity Repurchase Transaction, a new "control person", as defined by the TSX Venture Exchange being a number of individuals that hold more than 20% of the outstanding voting shares of the Company, was created. Following the closing, each of Robert Lewis and Thomas Lewis own approximately 17.22% of the issued and outstanding Common Shares and Wayne Bass owns approximately 10.32% of the issued and outstanding Common Shares, all on an undiluted basis, and in combination, Robert Lewis, Thomas Lewis and Wayne Bass hold approximately 44.76% of the issued and outstanding Common Shares.

The Debt to Equity Repurchase Transaction and the creation of a new control person of CanAm were both approved by disinterested shareholders at the Annual General and Special Meeting of Shareholders on July 25, 2014. The full details of the above matters were described in the Company's Management Information Circular which was mailed to shareholders in connection with the meeting and which is available on the Company's website and www.sedar.com.

For Further Information:

CanAm Corporate Office:

Jos De Smedt, President & CEO

Tel: 403.262.3797

Toll Free: 1.877.262.5888

Email: jdesmedt@canamcoal.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws. 

SOURCE: CanAm Coal Corp.  

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