MONTREAL, May 13 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB) announces
that is has purchased CA$20.0 million in principal amount of its
outstanding 10% senior secured debentures through a debt substantial
issuer bid. Giving effect to this transaction, the Corporation's
long-term term debt is reduced to approximately CA$121.7 million.
A total of CA$34.178 million principal amount of debentures were
tendered to the offer at CA$1,060 (plus any accrued but unpaid
interest) per CA$1,000 principal amount of debentures. A total of
CA$20.0 million principal amount of debentures was accepted. 58.5% of
the principal amount of debentures tendered was accepted.
On May 6, 2011, debentureholders passed an extraordinary resolution
approving amendments to the indenture governing the debentures. The
amendments, among other things, allow the Corporation to increase
available borrowings for working capital purposes under its existing
asset-based credit agreement by an amount equal to 50% of the aggregate
principal amount of debentures that it purchases, up to a maximum
''This transaction reduces our debt by CA$20.0 million and, combined
with the amendments to the debenture indenture, allows us to increase
our financial flexibility by aligning our capital structure more
closely with the inherent seasonality of our business,'' said Peter
Ferrante, Chief Financial Officer of MEGA Brands. ''As a result, our
cost of capital will improve as we move towards more variable debt at
more favourable interest rates.''
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 Games, MEGA Puzzles and Board
Dudes are trademarks of MEGA Brands Inc. or its affiliates.
All statements in this press release that do not directly and
exclusively relate to historical facts constitute "forward-looking
information" within the meaning of applicable Canadian securities laws.
These statements represent the Corporation's intentions, plans,
expectations and beliefs. Readers are cautioned not to place undue
reliance on these forward-looking statements. Forward-looking
information and statements are based on a number of assumptions and
involve risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied by them,
including, but not limited to risks, assumptions and uncertainties
described in the Corporation's MD&A for the year ended December 31,
2010, which is available at www.sedar.com. The Corporation disclaims any intention or obligation to publicly
update or revise any forward-looking information, whether as a result
of new information, future events or otherwise, other than as required
by applicable law.
SOURCE MEGA BRANDS INC.
For further information:
Chief Financial Officer
Tel: (514) 333-5555 ext. 2283