MONTREAL, May 25, 2011 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB)
announced today that its Board of Directors has approved a
consolidation of its issued and outstanding common shares on the basis
of one (1) new common share for every twenty (20) common shares issued
and outstanding. The number of warrants issued and outstanding will
remain the same following the consolidation; however, both the share
exchange rate and exercise price will change.
The share consolidation is expected to be completed by June 10, 2011 at
the latest and is subject to the approval of the Toronto Stock
Exchange. The precise effective date of the consolidation and the date
upon which common shares will begin trading on a consolidation-adjusted
basis will be announced at a later date.
At the Corporation's annual and special meeting held on June 10, 2010,
the Corporation's shareholders voted to authorize the Board of
Directors to proceed, at its discretion, with a share consolidation.
The Board of Directors believes the share consolidation has the
potential to improve the trading liquidity of the Corporation's common
shares and their attractiveness as an investment.
''In recent months, we have reported improved financial results,
transitioned to International Financial Reporting Standards,
successfully completed a substantial debt buyback which reduced our
long-term debt by CA$20.0 million and obtained amendments to our
debenture terms which improve our financial flexibility,'' said Peter
Ferrante, Chief Financial Officer of MEGA Brands. ''With these
significant milestones behind us, this is an appropriate time to
complete the share consolidation which our shareholders and the market
have been expecting since last June.''
Following the consolidation, each shareholder will hold one (1) common
share for every 20 pre-consolidation shares. No fractional shares will
be issued. Any fractional shares resulting from the consolidation will
be rounded down to the nearest whole number. Giving effect to the
consolidation, the Corporation will have approximately 16,363,661
issued and outstanding common shares.
Information for Warrant Holders
The number of warrants issued and outstanding will remain unchanged at
243,844,000. Following the consolidation, warrant holders will be able
to acquire one (1) common share in exchange for every twenty (20)
warrants at an exercise price of $9.94 per common share at any time
until March 30, 2015. The adjustment to the exercise price of the
warrants reflects the terms of the warrant indenture.
Full exercise of the issued and outstanding warrants will result in the
issuance of 12,192,200 common shares for gross proceeds of
approximately CA$121.2 million. Under the terms of the warrant
indenture, such proceeds will be used to purchase the Corporation's
debentures, of which the principal amount currently outstanding is
approximately CA$121.7 million.
The Corporation's Transfer Agent, CIBC Mellon Trust Company, will mail
letters of transmittal to registered shareholders following the
effective date indicating the procedure to follow in order to exchange
their current share certificates for new post-consolidation share
certificates. Shareholders who hold their shares in ''street name''
will be contacted by their banks or brokers with any instructions.
The Corporation does not intend to seek new trading symbols for its
common shares or warrants from the Toronto Stock Exchange in connection
with this consolidation. Further information on the consolidation is
contained in the Corporation's information circular dated May 13, 2010,
a copy of which is available electronically at www.sedar.com.
About MEGA Brands
MEGA Brands Inc. is a trusted family of leading global brands in
construction toys, games & puzzles, arts & crafts and stationery. They
offer engaging creative experiences for children and families through
innovative, well-designed, affordable and high-quality products. Visit http://www.megabrands.com for more information.
The MEGA logo, Mega Bloks, Rose Art, MEGA Puzzles, MEGA Games and Board
Dudes are trademarks of MEGA Brands Inc. or its affiliates.
SOURCE MEGA BRANDS INC.
For further information:
Chief Financial Officer
Tel: (514) 333-5555 ext. 2283