HALIFAX, Nov. 13, 2012 /CNW/ - Clarke Inc. ("Clarke" or the "Company")
(TSX: CKI CKI.DB.A) announced today that it intends to seek the
approval of the holders of its 6.00% convertible unsecured subordinated
debentures due December 31, 2013 (the "Debentures") to extend the
maturity date of the Debentures by five years from December 31, 2013 to
December 31, 2018 (the "Extension"). The Extension will be considered
at a meeting of debentureholders (the "Debentureholders") to be held on
January 10, 2013 (the "Meeting").
Reasons for Extension
The principal purpose of the Extension is for Clarke to maintain the
flexibility it currently has to pursue its investment strategy and to
continue to build value for all of its securityholders. The Extension
reflects many of the comments received from Debentureholders in
connection with Clarke's previous proposal to amend the Debentures,
including comments regarding the conversion feature of the Debentures,
and Clarke believes the Extension is advantageous to Debentureholders.
Clarke believes that the advantages of the Extension include the
No change in the conversion rights of the Debentures. Debentureholders retain the right to convert the Debentures into
common shares of Clarke and, therefore, have the opportunity to
participate in the growth of Clarke's businesses and investment
portfolio. This conversion feature offers Debentureholders the
opportunity to generate capital appreciation from the Debentures in
addition to earning interest during the extended term.
Consent fee. Debentureholders that vote in favour of the proposed amendments will
receive a consent fee of 60 basis points or $6 per $1,000 principal
amount of Debentures and soliciting dealers will receive a fee of 40
basis points or $4 per $1000 principal amount of Debentures.
Continued high interest rate. Clarke believes the 6.0% interest rate on the Debentures represents an
attractive yield, especially in the current low interest rate
environment and in light of other reinvestment opportunities available.
Strong financial position. Clarke has the financial capacity, through its committed credit
facilities and marketable securities, to redeem the Debentures at this
time. Clarke believes that doing so would result in Debentureholders
losing an attractive and recurring source of income as well as the
potential for capital appreciation through the conversion feature of
George Armoyan, CEO of Clarke, stated: "We believe that Clarke's
proposal to extend the maturity date of the Debentures represents an
attractive opportunity for Debentureholders to retain a high-interest
investment for five more years while also being able to participate in
Clarke's growth during that time." Mr. Armoyan added: "In developing
this revised debenture proposal, we have incorporated many of the
comments made by our Debentureholders as part of our previous debenture
proposal. We believe this is a great opportunity for both Clarke and
all of our securityholders."
The Company will pay a consent fee equal to $6 per $1,000 principal
amount of Debentures (the "Consent Fee") conditional upon, among other
things, holders of at least 66⅔% of the principal amount of the
Debentures, present or represented by proxy at the Meeting, voting for
the Extension. The Company will, as promptly as practicable after the
satisfaction of the conditions precedent, pay the Consent Fee to
Debentureholders that voted for the Extension. Concurrently with the
payment of a Consent Fee in respect of any Debentures, the Company will
also, subject to certain terms and conditions, pay a soliciting
dealers' fee equal to $4 per $1000 principal amount of Debentures in
respect of such Debentures to soliciting dealers that are entitled to
receive the fee.
The Board of Directors of the Company (the "Board") believes that the
Extension provides a number of benefits to Clarke, its shareholders and
the Debentureholders. The Board UNANIMOUSLY RECOMMENDS that the
Debentureholders vote FOR the Extension.
Further information with respect to the Extension will be outlined in a
management information circular (the "Circular") expected to be mailed
to the Debentureholders in mid-December 2012.
For the Extension to be approved, at least 66 2/3% of the principal
amount of the Debentures voted (either in person at the Meeting or by
proxy) must be FOR votes.
Detailed voting instructions will be found in the Circular. The Meeting
is scheduled to be held on January 10, 2013 at 10:00 a.m. (Atlantic
Daylight Time) at 6009 Quinpool Road, 9th Floor, Halifax, Nova Scotia
Halifax-based Clarke invests in a variety of private and publicly-traded
businesses and participates actively where necessary to enhance
performance and increase return. Clarke's securities trade on the
Toronto Stock Exchange (CKI; CKI.DB.A); for more information about
Clarke, please visit our website at www.clarkeinc.com.
SOURCE: CLARKE INC.
For further information:
Chief Financial Officer
Telephone: (902) 442-3000