Calgary, AB / ACCESSWIRE / July 28, 2014 / CanAm Coal Corp. (TSXV: COE) ("CanAm" or the "Company") held its Annual General and Special Meeting of Shareholders (the "AGM") on July 25, 2014 and is pleased to announce that all of the resolutions put forth at the AGM were approved with all resolutions receiving greater than 97% of the votes received for the resolution. The six members of the board of directors elected at the meeting are Jonathan Legg, Timothy J. Bergen, Timothy Nakaska, Thomas Lewis, Scott Bolton and Jos De Smedt. Information concerning the directors who were elected at the meeting and the matters that were approved by shareholders at the meeting can be found in CanAm's information circular dated June 27, 2014 and filed on SEDAR and on the Company's website.
At the meeting, the Company obtained disinterested shareholder approval respecting the repurchase of $7.2 million in outstanding 2016 debentures held by related parties (also referred to as "Insiders") in exchange for common shares of the Company (the "Conversion"). The Conversion will be done at a price of $0.06 per common share and based on the Company's current share price (at Friday's close of $0.04), Insiders will be converting at a 50% premium to the current market price.
This debt to equity transaction was part of a three-step plan to significantly improve the financial position and capital structure of the Company and involved:
-Refinancing the Company's equipment debt in order to provide additional liquidity at the operating company level;
-Refinancing the Company's debenture debt maturing in May 2014 with long-term debt; and
-Increasing the Company's equity position in order to improve its debt to equity ratio and capital structure.
In April and May of 2014, the Company completed parts one and two of its plan as it was successful in refinancing its US equipment debt and was also successful in fully refinancing its debentures maturing in May 2014. The Conversion approval obtained at the AGM was the third step in the overall plan.
As a result of these and other steps taken by the Company, the financial position and the capital structure of the Company has significantly improved and, on a proforma basis as at March 31, 2014, working capital, net debt and the debt to equity ratio has improved as follows:
-Working capital improvement of approximately $19 million;
-Net debt decrease of $7.2 million; and
-Debt to equity ratio improvement of 52:1 to 5:1
Also, over the remaining term of the August 2016 debentures, this Conversion will reduce the Company's interest cost by approximately $1.4 million, including approximately $0.3 million in 2014.
Company Chairman of the Board, Jonathan Legg commented: "Our team has worked hard over the last couple of months in order to address our financial position challenges and the execution of our three-step plan has culminated in a more sustainable debt to equity ratio and capital structure. This will better position us to continue to execute on our strategy of growing our production capacity and of expanding our reserve base of high quality coals."
The Company will be releasing its second quarter financial results at the end of August.
At the meeting, management also provided an investor update and the corporate presentation is posted on the Company's website at www.canamcoal.com.
For Further Information:
CanAm Corporate Office:
Jos De Smedt, President & CEO
Toll Free: 1.877.262.5888
Email: [email protected]
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.
Forward-Looking Information and Statements
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.