Crew Gold Corporation

Published : August 17th, 2009

Initiatives to Strengthen Balance Sheet through ...

( 0 vote, 0/5 ) Print article
  Article Comments Comment this article Rating Follow Company  
0
Send
0
comment
    

Published: 09:08 17.08.2009 GMT+2 /HUGIN /Source: Crew Gold Corporation /OSE: CRU /ISIN: CA2265344028

Initiatives to Strengthen Balance Sheet through a Proposed Debt to Equity Conversion and Rights Offering

Press Release - August 17, 2009
 
Crew Gold Announces Initiatives to
Strengthen Balance Sheet through a Proposed
Debt-to-Equity Conversion and Rights Offering
 
LONDON, United Kingdom: Crew Gold Corporation ("Crew" or "the Company") (TSX: CRU) (OSE: CRU) today announced initiatives to strengthen its balance sheet, including the proposed conversion into common shares (the "Debt-for-Equity Conversion") of approximately US$148 million principal amount of bonds ("Bonds") issued by Crew and a rights offering (the "Rights Offering") pursuant to which the Company intends to issue subscription rights ("Rights") that will entitle holders of common shares to purchase up to 90 million common shares of Crew for an aggregate purchase price of NOK 90 million (collectively, the "Restructuring").  Crew has appointed Arctic Securities ASA ("Arctic Securities") as sole lead manager with respect to the Rights Offering and as financial advisor with respect to the Debt-for-Equity Conversion.
 
"As a result of previously announced delays in reaching full production capacity at the Lefa gold mine in Guinea, we believe that it is in the best interests of the Company to reduce its financial leverage," said Jens Ulltveit-Moe, Chairman. "This restructuring is designed to significantly improve the Company's capital structure and to provide the Company with greater flexibility to execute its business plan and explore strategic alternatives."  
 
Following completion of the proposed Debt for Equity Conversion and the Rights Offering, the holders of the Bonds being converted into common shares (the "Bondholders") will hold, in the aggregate, 53% of the Company's outstanding common shares with existing shareholders and those who exercise Rights holding the balance. In recognition of the significant ownership interest to be acquired by Bondholders under the Restructuring, the Company will appoint four individuals, nominated by its principal bondholders, to its board of directors upon completion of the Restructuring, while increasing the number of directors from seven to eight. The four new directors will be Robert Byford, Mitchell Gropper, Gordon Lawson and Jan Oksum. The new directors will join Mr. Ulltveit-Moe, who will remain Chairman, Cameron Belsher, Richard Robinson and Tom Ruud.
 
Debt-for-Equity Conversion
 
Crew currently has approximately US$99.8 million principal amount of senior secured bonds due March 30, 2011 (the "Senior Secured Bonds") outstanding, US$193.5 million principal amount of unsecured convertible bonds due December 1, 2010 (the "Convertible Bonds") outstanding and US$20.2 million principal amount of senior unsecured bonds due October 27, 2009 (the "Unsecured Bonds") outstanding.
 
Under the proposed Debt-for-Equity Conversion, Crew will convert into common shares:
 
  •     20% of the outstanding principal amount of the Senior Secured Bonds (US$20.0 million)
  •     60% of the outstanding principal amount of the Convertible Bonds (US$116..1 million)
  •     60% of the outstanding principal amount of the Unsecured Bonds (US$12.1 million)  
  •  
    Following completion of the proposed Debt-for-Equity Conversion, Crew will have approximately US$79.9 million principal amount of Senior Secured Bonds, US$77.4 million principal amount of Convertible Bonds and US$8.1 million principal amount of Unsecured Bonds outstanding.
     
    The aggregate number of common shares issued to Bondholders under the Debt-for-Equity Conversion will be the number of common shares required to be issued to ensure that the Bondholders have an aggregate ownership interest of 53% following completion of the Restructuring. As the number of common shares required to be issued to Bondholders will depend on the number of common shares issued in the Rights Offering, the conversion price for the Debt-for-Equity Conversion will not be calculated until the Rights Offering is completed. Depending on the number of common shares issued in the Rights Offering, the conversion price for any portion of the bonds denominated in NOK will range from NOK 4.02 to NOK 4.61 and the conversion price for any portion of the Bonds denominated in US$ will range from US$0.67 to US$0.76.  
     
    The proposed Debt-for-Equity Conversion is subject to the separate approval of (i) the holders of the Senior Secured Bonds, (ii) the holders of the NOK-denominated tranche of the Convertible Bonds, (iii) the holders of the US$-denominated tranche of the Convertible Bonds and (iv) the holders of the Unsecured Bonds. In each case, the proposed transaction must be approved by 2/3 of Bondholders represented in person or by proxy at the applicable Bondholder meeting. Crew has entered into voting support agreements with the most significant holders of the Senior Secured Bonds and Convertible Bonds.
     
    It is anticipated that a Notice to Bondholders of the meetings to be held to consider the Restructuring containing full details of the Restructuring will be mailed and posted on the Company's website early next week. The Bondholders' meetings are expected to be held prior to the end of August.
     
    Rights Offering
     
    Under the terms of the proposed Rights Offering, shareholders will receive 0.8417 Rights for each common share held. For every one Right held, holders of Rights will be entitled to subscribe for one common share at a subscription price of NOK 1.00 per share. Shareholders who exercise their subscription right in full will be granted an additional right to subscribe for any common shares which are not otherwise subscribed for pursuant to the Rights Offering. Common shares issued to shareholders who exercise their additional subscription right will be allocated on a pro rata basis.
     
    If the Rights Offering is fully subscribed, an aggregate of 90 million common shares will be issued to holders of Rights. Under a guarantee agreement (the "Guarantee Agreement") which the Company will enter into with its largest shareholder Umoe AS, Umoe AS will subscribe for that number of common shares which is necessary to ensure that a minimum of 65 million common shares are issued pursuant to the Rights Offering. Accordingly, the aggregate number of common shares issued pursuant to the Rights Offering will range from 65 million to 90 million and the aggregate subscription proceeds will range from NOK 65 million to NOK 90 million. Proceeds from the Rights Offering will be used for capital expenditures at Lefa, including refurbishment of mobile equipment.
     
    The Company anticipates that only those shareholders of the Company who are resident in the European Union and/or the European Economic Area will be permitted to participate in the Rights Offering. The Rights will be fully transferrable and will be listed on the Oslo Stock Exchange during the subscription period. The common shares underlying the Rights are expected to be listed for trading on both the Oslo Stock Exchange and the Toronto Stock Exchange, provided that any common shares issued pursuant to the exercise of Rights may not be transferred over the facilities of the Toronto Stock Exchange or to a Canadian resident for a period of four months and one day following the date of issuance. Provided that Rights that would otherwise have been issued to shareholders in ineligible jurisdictions have an economic value exceeding their estimated sales costs, Arctic Securities will be authorized to sell such Rights and distribute the proceeds of such sale to those shareholders.
     
    Formal commencement of the Rights Offering is subject to Bondholder approval of the Debt-for-Equity Conversion and the approval of a rights offering prospectus by the Oslo Stock Exchange.. The Company intends to file a rights offering prospectus with the Oslo Stock Exchange as soon as reasonably practical after the required Bondholder approvals are obtained.
     
    Crew anticipates that the first business day after the required Bondholder approvals are obtained will be the last day that common shares are traded inclusive of Rights. Thus, the Company expects the common shares to be traded exclusive of Rights on the Oslo Stock Exchange from and including the second business day after the required Bondholder approvals have been obtained.   
     
    Ownership of Common Shares Following the Restructuring
     
    Following completion of the Restructuring, funds managed by GLG Partners will in the aggregate own approximately 18.3% of Crew's outstanding common shares. It is anticipated that no other Bondholder will beneficially own, or exercise control or direction over, more than 4% of the Crew's outstanding common shares following completion of the Restructuring. 
     
    The balance of the common shares outstanding following completion of the Restructuring will be held by the existing shareholders of the Company and investors who participate in the Rights Offering. Depending on the size of the Rights Offering, common shares issued and outstanding as of the date hereof will represent from 25.5% to 29.2% of the post-Restructuring common shares and common shares issued pursuant to the exercise of Rights will represent from 17.8% to 21.5% of the post-Restructuring common shares.
     
    Umoe AS currently holds approximately 36.8% of the Company's issued and outstanding common shares. If the Rights Offering is fully subscribed and Umoe AS participates on a pro rata basis only, Umoe AS's ownership interest will be reduced to 17.3%. If the Rights Offering is less than fully subscribed and Umoe AS acquires shares pursuant to the additional subscription right or the Guarantee Agreement, the decrease in Umoe AS's ownership interest resulting from the Debt-for-Equity Conversion will not be as significant.      
     
    The closing of the Rights Offering and the Debt-for-Equity Conversion are subject to customary closing conditions and the receipt of necessary regulatory approvals, including the approval of the Oslo Stock Exchange and the Toronto Stock Exchange. 
     
    Information About Proposed New Directors
     
    Robert Byford (Vancouver, Canada) recently retired from KPMG in Vancouver after 39 years with the firm, having served in various roles including as founding partner of its Corporate Finance Practice.  He has advised clients from many industries on corporate finance matters including equity and debt capital raising, capital restructuring, mergers, buyouts and alliances.  He is also a frequent speaker on corporate governance matters and disclosure controls and procedures, and has served in a number of other roles including as an elected governor of the Vancouver Stock Exchange and as an advisor to the British Columbia Securities Commission. 
     
    Mitchell Gropper (Vancouver, Canada) is lawyer and a partner with Farris in Vancouver having previously spent 28 years with McCarthy T�trault (including serving as Managing Partner for two years) and prior to that having spent three years as a professor in the Faculty of Law at Western University in London, Ontario.  He has an active practice, often giving advice to boards of directors and independent committees of boards of directors; corporations and directors in "going private" transactions; and mergers and acquisitions of public and private corporations.  Mr. Gropper has served as a director of various public and private corporations. 
     
    Gordon Lawson (London, England) has worked in the City for over 30 years, including acting as head of equity proprietary trading and a member or the European Management Board at Salomon Brothers / Citigroup and then as a founding partner of Pendragon Capital. He is currently on the board of various funds and listed companies and an advisor to several hedge funds and funds of funds.  He is also a Justice of the Peace and holds an MBA from Cranfield Business School. 
     
    Jan Oksum (Oslo, Norway) was President and CEO of Norske Skogindustrier ASA until 2006 having been with the company since 1979 in a variety of roles.  He also serves and has served as a director of various other companies both listed and private. 
     
    William LeClair
    Interim CEO
     
    Safe Harbour Statement
    Certain statements contained herein that are not statements of historical fact may constitute forward-looking statements and are made pursuant to applicable and relevant national legislation (including the Safe-Harbour provisions of the United States Private Securities Litigation Reform Act of 1995) in countries where Crew is conducting business and/or investor relations. Forward-looking statements include, without limitation, those with respect to (1) the completion of the Restructuring, (2) the process, terms and timing of the Restructuring, (3) the intended use of the proceeds of the Rights Offering, (4) the expected actions of third parties named in this press release, (5) the expected impact of the Restructuring on Crew's capital structure and (6) the expected benefits of the Restructuring. The words "expect", "anticipate", "will", "believe" and "may", and other similar expressions, are often used to identify forward-looking statements. 
     
    Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to be materially different from the events or results expressed or implied by such forward-looking statements. In evaluating these statements, prospective purchasers should specifically consider various factors that may cause actual events or results to be materially different from the events or results expressed or implied by such forward-looking statements. Risk factors that could impact the Restructuring or the expected benefits of the Restructuring include, without limitation, (1) the actual results of current exploration activities, (2) conclusions of economic evaluations, (3) changes in project parameters as plans continue to be refined, (4) possible variations in grade and ore densities or recovery rates, (5) failure of plant, equipment or processes to operate as anticipated, (6) accidents, labour disputes and other risks of the mining industry, (7) delays in obtaining government approvals or financing or in completion of development or construction activities and (8) risks and uncertainties existing in world capital markets generally. Although Crew has attempted to identify important factors that could cause actual events or results to differ from those described in forward-looking statements contained herein, there can be no assurance that the forward-looking statements will prove to be accurate as actual events or results could differ materially from those anticipated in such statements.
    The material factors and assumptions used to develop forward-looking statements include, without limitation, (1) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment or otherwise, (2) continued development, operation and production at LEFA and Maco consistent with our current expectations, (3) foreign exchange rates among the currencies that Crew does business in being approximately consistent with current levels, (4) certain price assumptions for gold, (5) prices for electricity, fuel oil and other key supplies remaining consistent with current levels, (6) production forecasts meeting expectations, (7) the accuracy of our current mineral reserve and mineral resource estimates and (8) materials and labour costs increasing on a basis consistent with our expectations.
    Except as may be required by applicable law or stock exchange regulation, the Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.


    Rights Offering and Debt to Equity Conversion




    This content was distributed through

    Hugin Group

    - connecting communication professionals with their target audience. Visit us here.
    <
    Data and Statistics for these countries : Canada | Guinea | Norway | United Kingdom | All
    Gold and Silver Prices for these countries : Canada | Guinea | Norway | United Kingdom | All

    Crew Gold Corporation

    PRODUCER
    CODE : CRU.TO
    ISIN : CA 4020361073
    CUSIP : 402036107
    Follow and Invest
    Add to watch list Add to your portfolio Add or edit a note
    Add Alert Add to Watchlists Add to Portfolio Add Note
    ProfileMarket
    Indicators
    VALUE :
    Projects & res.
    Press
    releases
    Annual
    report
    RISK :
    Asset profile
    Contact Cpy

    Crew Gold is a gold producing company based in United kingdom.

    Crew Gold holds various exploration projects in Philippines.

    Its main assets in production are LEFA MINE in Guinea and NALUNAQ in Greenland and its main asset in development is MACO GOLD MINE in Philippines.

    Crew Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 496.1 millions as of today (US$ 502.1 millions, € 373.4 millions).

    Its stock quote reached its lowest recent point on November 28, 2008 at CA$ 0.05, and its highest recent level on August 06, 2010 at CA$ 6.00.

    Crew Gold has 106 922 000 shares outstanding.

    Your feedback is appreciated, please leave a comment or rate this article.
    Rate : Average note :0 (0 vote) View Top rated
     
    Corporate Presentations of Crew Gold Corporation
    4/17/2007Induced Polarization Crew Mobilizes To Pardo Property
    In the News and Medias of Crew Gold Corporation
    7/6/2009disposes Nalunaq assets for USD1.5m
    Financings of Crew Gold Corporation
    6/17/2008All Conditions for Private Placement Satisfied
    6/13/2008Private Placement Fully Subscribed
    6/12/2008Contemplated Private Placement
    Nominations of Crew Gold Corporation
    10/14/2009(NO) - Crew Gold Appointment of New Chairman
    11/13/2008Crew Appoints Financial Advisors and Sets Price for ...
    7/28/2008Staff Appointments
    Financials of Crew Gold Corporation
    11/16/2009(NO) - Financial Results for the Quarter and Nine Months End...
    8/17/2009Financial Results for the Quarter and Six Months Ended ...
    5/17/2009Financial Results for the Quarter Ended March 31, 2009
    11/17/2008Financial Results for Quarter and Nine Months Ended ...
    8/13/2008Financial Results for the Quarter and Six Months Ended ...
    5/13/2008 Financial Results for Quarter Ended March 31, 2008
    Project news of Crew Gold Corporation
    1/25/2010(Lefa Mine)Update January 25, 2010
    6/23/2009(Lefa Mine)Revised Production Guidance for LEFA for 2009
    4/23/2008(Lefa Mine)Lefa Exploration Update
    2/18/2008(Lefa Mine)Lefa Project Update
    Corporate news of Crew Gold Corporation
    7/23/2010(NO) - Consolidation of common shares on a 20 to 1 basis
    6/2/2010(NO) - Severstal and Endeavour Financial Reach Agreement for...
    1/25/2010Update on Q4 2009 production and other matters
    1/28/2010Endeavour Financial Secondary Market Purchase
    12/29/2009Listing Prospectus In Connection With The Issuance Of New Sh...
    12/22/2009Delivery of Shares under its Debt Restructuring
    12/3/2009Update on Interest Payments
    12/8/2009(NO) - Purchase of Crew Gold Shares
    12/4/2009(NO) - Crew Gold Corporation Announces Closing of Debt Restr...
    11/30/2009 Crew Gold Provides an Update on the Debt-for-Equity ...
    11/24/2009(NO) - Results from Bondholders' Meetings
    11/16/2009(NO) - Financial Statements and MDA for Quarter and Nine Mon...
    10/28/2009(NO) - Crew Gold Corporation Completes Sale of the Nugget ....
    10/28/2009(NO) - Crew Gold Announces an Agreement in Principle with ....
    10/13/2009(NO) - Crew Gold Announces Resignations
    10/12/2009(NO) - Crew Gold Provides Corporate and LEFA Operational Upd...
    9/17/2009(NO) - Crew Gold Corporation announces an agreement to sell ...
    9/10/2009Gives Production and Cash Update
    9/9/2009completes negotiations for the ...
    9/1/2009Results from Bondholders' Meetings
    8/27/2009provides clarification of the process ...
    8/20/2009Summons to Bondholders Meetings
    8/17/2009Initiatives to Strengthen Balance Sheet through ...
    8/17/2009Financial Statements and MDA for the Quarter and Six ...
    7/3/2009Sale of Nalunaq Assets
    5/18/2009Financial Statements and MDA for Quarter Ended 31 March 2009
    2/27/2009Unaudited results for the Quarter and Year ended ...
    2/23/2009Q4 Unaudited Financial Statement Release
    2/19/2009Consolidation of Common Shares on an 8 to 1 Basis
    2/9/2009launches offer to exchange NOK ...
    1/30/2009Results from Special Shareholder Meeting
    1/12/2009Notification of Trade for Simon Russell
    1/8/2009Notice of Special Shareholder Meeting
    1/5/2009Notification of Trade for Brian Hosking
    12/29/2008Update on Lefa Operations
    12/22/2008ANNOUNCES ISSUANCE OF NEW SHARES
    12/19/2008Notification of Trade for Simon Russell
    12/15/2008Notification of Trade for Cameron Belsher
    12/15/2008Announces Final Allocations for Rights Offering
    12/9/2008Announces Fully Subscribed Rights Offering
    11/21/2008CREW ANNOUNCES LISTING OF SUBSCRIPTION RIGHTS
    11/18/2008Crew Announces Record Date for Proposed Rights Offering
    11/17/2008Financial Statements & MDA for Quarter & Nine Months ...
    11/10/2008The company offers the following clarification ...
    11/10/2008PROVIDES OPERATIONAL AND FINANCIAL UPDATE
    9/26/2008Take Over of Mining Works at LEFA
    9/10/2008Listing Prospectus in Connection with Issuance of New Shares
    8/20/2008CEO Jan Vestrum Steps Down
    8/13/2008Financial Statements and Management's Discussion and ...
    7/17/2008Issuance of Shares
    7/10/2008Notification of Trade
    7/7/2008Employee and Director Updates
    6/27/2008AGM Minutes on 27 June 2008
    6/26/2008Notice of Annual and Special General Meeting of Shareholders
    6/16/2008Notification of Trade-BH
    6/13/2008Notification of Trade BH
    6/6/2008Lefa Measured and Indicated Resources Passes 5 Million Ounce...
    5/29/2008Notification of Trade
    5/14/2008Financial Statements and Management's Discussion and ...
    5/14/2008Notification of Trade
    4/28/2008Notification of Trade
    4/10/2008 Notification of Trade for Jan Vestrum
    4/2/2008Response to Intex Resources Press Release on March ...
    4/1/2008Correction to MD&A and Financial Statements for Period ...
    3/31/2008Management Discussions and Analysis and Financial ...
    3/31/2008Company Presentation 31 March 2008
    3/31/2008 Results for Quarter Ended 31 December 2008
    3/12/2008Release Dates for Quarterly and Year End Results
    2/14/2008Final Placing of Shares in Intex Resources ASA
    1/23/2008Flagging
    1/14/2008 Board of Directors
    5/17/2007Induced Polarization Results Define Strong Anomalies On Pard...
    Comments closed
     
    Latest comment posted for this article
    Be the first to comment
    Add your comment
    TORONTO (CRU.TO)FRANKFURT (KNC.F)
    4.64+1.31%0.070+59.09%
    TORONTO
    CA$ 4.64
    01/18 15:36 0.060
    1.31%
    Prev close Open
    4.58 4.59
    Low High
    4.59 4.64
    Year l/h YTD var.
     -  -
    52 week l/h 52 week var.
    - -  4.64 -%
    Volume 1 month var.
    10,400 -%
    24hGold TrendPower© : 16
    Produces Gold
    Develops Gold
    Explores for
     
     
     
    Analyse
    Interactive chart Add to compare
    Interactive
    chart
    Print Compare Export
    Last updated on : 3/1/2010
    You must be logged in to use the porfolio and watchlists (free)
    Top Newsreleases
    MOST READ
    Annual variation
    DateVariationHighLow
     
    5 years chart
     
    3 months chart
     
    3 months volume chart
     
     
    Mining Company News
    Plymouth Minerals LTDPLH.AX
    Plymouth Minerals Intersects Further High Grade Potash in Drilling at Banio Potash Project - Plannin
    AU$ 0.12-8.00%Trend Power :
    Santos(Ngas-Oil)STO.AX
    announces expected non-cash impairment
    AU$ 7.75-1.02%Trend Power :
    Oceana Gold(Au)OGC.AX
    RELEASES NEW TECHNICAL REPORT FOR THE HAILE GOLD MINE
    AU$ 2.20+0.00%Trend Power :
    Western Areas NL(Au-Ni-Pl)WSA.AX
    Advance Notice - Full Year Results Conference Call
    AU$ 3.86+0.00%Trend Power :
    Canadian Zinc(Ag-Au-Cu)CZN.TO
    Reports Financial Results for Q2 and Provides Project Updates
    CA$ 0.12+4.55%Trend Power :
    Stornoway Diamond(Gems-Au-Ur)SWY.TO
    Second Quarter Results
    CA$ 0.02+100.00%Trend Power :
    McEwen Mining(Cu-Le-Zn)MUX
    TO ACQUIRE BLACK FOX FROM PRIMERO=C2=A0
    US$ 3.28-6.82%Trend Power :
    Rentech(Coal-Ngas)RTK
    Rentech Announces Results for Second Quarter 2017
    US$ 0.20-12.28%Trend Power :
    KEFIKEFI.L
    Reduced Funding Requirement
    GBX 0.60+0.67%Trend Power :
    Lupaka Gold Corp.LPK.V
    Lupaka Gold Receives First Tranche Under Amended Invicta Financing Agreement
    CA$ 0.11+0.00%Trend Power :
    Imperial(Ag-Au-Cu)III.TO
    Closes Bridge Loan Financing
    CA$ 2.13-11.98%Trend Power :
    Guyana Goldfields(Cu-Zn-Pa)GUY.TO
    Reports Second Quarter 2017 Results and Maintains Production Guidance
    CA$ 1.84+0.00%Trend Power :
    Lundin Mining(Ag-Au-Cu)LUN.TO
    d Share Capital and Voting Rights for Lundin Mining
    CA$ 6.44-8.39%Trend Power :
    Canarc Res.(Au)CCM.TO
    Canarc Reports High Grade Gold in Surface Rock Samples at Fondaway Canyon, Nevada
    CA$ 0.26-7.14%Trend Power :
    Havilah(Cu-Le-Zn)HAV.AX
    Q A April 2017 Quarterly Report
    AU$ 0.32-5.88%Trend Power :
    Uranium Res.(Ur)URRE
    Commences Lithium Exploration Drilling at the Columbus Basin Project
    US$ 6.80-2.86%Trend Power :
    Platinum Group Metals(Au-Cu-Gems)PTM.TO
    Platinum Group Metals Ltd. Operational and Strategic Process ...
    CA$ 1.95-10.14%Trend Power :
    Devon Energy(Ngas-Oil)DVN
    Announces $340 Million of Non-Core Asset Sales
    US$ 57.69-8.60%Trend Power :
    Precision Drilling(Oil)PD-UN.TO
    Announces 2017Second Quarter Financial Results
    CA$ 8.66-0.35%Trend Power :
    Terramin(Ag-Au-Cu)TZN.AX
    2nd Quarter Report
    AU$ 0.04+0.00%Trend Power :