Lloyd I. Miller and entities related to him (the "Miller Holders") announced today that they have commenced discussions with other holders of the Gold-Linked Notes issued by Gran Columbia Gold Corp. (the "Company") to form an ad hoc group to oppose the Company's debt restructure proposal under the Business Corporations Act (British Columbia). The Miller Holders believe that the Company's restructure proposal for the senior Gold-Linked Notes significantly undervalues the Gold-Linked Notes. On September 29, 2015, the Company announced its restructuring proposal for both its senior Gold-Linked Notes and its junior Silver Linked Notes (the "Restructure Proposal"). The Company has set a meeting concerning the Restructure Proposal for November 27, 2015. The Miller Holders (owners of approximately 18% of the $100 Million Gold-Linked Notes) believe that the Company's Restructure Proposal fails to honor the senior, secured status of the Gold-Linked Notes. On November 4, 2015, the Miller Holders noted their opposition to the Restructure Proposal for the following reasons (among others). The Restructure Proposal: - Significantly undervalues the Gold-Linked Notes.
- Improperly favors the junior Silver-Linked Notes and equity interests.
- Ignores the collateral rights covering the Gold-Linked Notes.
- Provides for interest on the Gold-Linked Notes to be "paid in kind" at the Company's election rather than cash despite the Company's financial performance.
- Provides for conversion of the Gold-Linked Notes into common equity and the Company's election (the same securities into which the junior Silver Linked Notes may be converted).
- Establishes an inferior conversion price for the senior Gold-Linked Notes in comparison to the junior Silver-Linked Notes.
- Was proposed without significant involvement of the major holders of Gold-Linked Notes.
The Miller Holders have concluded that the foregoing and other features of the Restructure Proposal are not in the best interests of the holders of the Gold-Linked Notes. As such, the Miller Holders are opposing the current Restructure Proposal, whether pursued under the Business Corporations Act or the Companies' Creditors Arrangement Act (CCAA). On November 4, 2015, the Miller Holders announced their intention to form an ad hoc group to address the Restructure Proposal. Since that time, holders opposing the restructure proposal have contacted the Miller Holders. The Miller Holders may be contacted by additional non-insider holders of the Gold-Linked Notes interested in joining the ad hoc group at the number below. THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND AS A RESULT MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM. FORWARD LOOKING STATEMENTS This news release may contain forward-looking statements or forward looking information under securities legislation including the intention of the Miller Holders to oppose the restructure proposal and their formation of an ad hoc group. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lloyd-i-miller-iii-and-related-senior-gold-linked-noteholders-commence-discussions-with-holders-regarding-formation-of-ad-hoc-group-in-opposition-to-restructuring-proposal-by-gran-columbia-gold-corp-tsx-gcm-otc-tprff-which-300174831.html
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