SPOKANE, WA, Sept. 18, 2012 /CNW/ - Gold Reserve Inc. (TSX VENTURE:GRZ) (NYSE-MKT:GRZ) (the "Company")
announced today that it is notifying holders ("Holders" or
"Noteholders") of its 5.50% Senior Subordinated Convertible Notes due
2022 (the "Notes") of its offer ("Offer") to the Holders of an
opportunity to participate in a restructuring transaction that has been
agreed to with its four largest Noteholders.
On September 18, 2012 the Company announced that it had agreed with
Holders of 98.7% of the outstanding Notes ("Large Noteholders") to
restructure their Notes, subject to such consents as may be required
under the Indenture, that will allow the Company to restructure the
Notes with a combination of cash, common shares, modified terms for the
remaining balance of the Notes and a Contingent Value Right as
described further below. The Company is now offering the terms of that
restructuring arrangement to all remaining Noteholders such that the
Holders of the remaining 1.3% of the Notes (representing $1,080,000 in
aggregate principal amount) now can elect to accept the same
arrangement as was agreed by the Company with the Large Noteholders.
The Company has filed its Tender Offer Statement with respect to the
offer ("Offer"). Each Holder will have the option to tender their Notes
for the following consideration for each $1,000 in principal amount of
Notes: (i) $200 in cash, (ii) 147.06 common shares, (iii) $300 of
amended notes which will remain outstanding under the indenture
governing the Notes, as amended, (iv) a Contingent Value Right ("CVR")
entitling the holder to a percentage of an award or settlement of the
Company's ICSID arbitration claim against the Government of Venezuela
with respect to the expropriation of the Company's Brisas Project and
any proceeds from the sale of its mining data, and (v) additional cash
consideration payable based on each Holder's pro rata percentage of
Notes restructured pursuant to the Offer in an aggregate amount of up
to $1 million (collectively, the "Offer Consideration"). The maximum
CVR net of taxes and other deductions that will be paid if all Holders
elect to participate in the Offer will not exceed 5.535% of an award or
settlement and sale of the mining data. The Restructuring was approved
by the Company's shareholders at its annual and special meeting held on
June 27, 2012.
In order to surrender the Notes and participate in the Offer, Holders
must deliver a letter of transmittal no later than 5:00 p.m., New York
City time, on October 16, 2012 pursuant to the instructions in the
Pursuant to the Indenture, the Notes are currently convertible into
132.626 shares of the Company's common stock per $1,000 principal
amount of Notes, subject to adjustment under certain circumstances.
The Company will make available to Holders, through The Depository Trust
Company, documents specifying the terms, conditions and procedures for
surrendering and withdrawing Notes. Holders are encouraged to read
these documents carefully before making any decision with respect to
the surrender of the Notes, because these documents contain important
information regarding the details of the Company's obligation to
repurchase the Notes.
Doug Belanger, President stated, "This Tender Offer will complete our
commitment to offer to all remaining noteholders, the opportunity to
participate in the same note restructuring transaction that was agreed
to with the three largest noteholders. It is the Company's intention to
redeem for cash any notes outstanding after the completion of this
Holders of Notes are urged to read the Offer, letters of transmittal and
related offer materials when they become available because they contain
important information. Our Tender Offer Statement, which includes the
offer materials, is being filed with the Securities and Exchange
Commission ("SEC") today. The Offer, letters of transmittal and related
documents may be obtained free of charge at the SEC's website, www.sec.gov or by directing a request to the Company.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Further information regarding the Company can be located at www.goldreserveinc.com, www.sec.gov and www.sedar.com.
"Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release."
SOURCE: Gold Reserve Inc.
For further information:
A. Douglas Belanger, President
926 W. Sprague Ave., Suite 200
Spokane, WA 99201 USA
Tel. (509) 623-1500
Fax (509) 623-1634