NEW YORK CITY, April 22, 2014 /CNW/ - On March 4, 2014, Hale Capital Partners ("HCP"), through its subsidiary Crescent Silver, LLC, completed the acquisition of substantially all of the assets of United Mine Services, Inc. as part of a consensual foreclosure process (the "Foreclosure"). United Mine Services was a guarantor on a loan provided by HCP to United Silver Corp. (the "Company"), the parent of United Mine Services. As part of the Foreclosure, the aggregate principal amount outstanding under the loan was reduced by US$7,500,000 (being the US Dollar equivalent of CDN$8,335,500, based on the Bank of Canada noon rate on March 4, 2014) to an aggregate principal amount outstanding of US$2,001,643 (being the US Dollar equivalent of CDN$2,224,626, based on the Bank of Canada noon rate on March 4, 2014) (the "Remaining Principal Amount"). The loan was evidenced by a securities purchase agreement entered into among HCP, as agent and initial purchaser, and the Company and a convertible note granted by the Company to HCP (together, the "2012 Transaction Documents").
Pursuant to an order of the Ontario Superior Court of Justice (Commercial List) dated January 9, 2014 (the "Receivership Order"), Duff & Phelps Canada Restructuring Inc. was appointed as receiver and manager of the property, assets and undertaking of the Company. All of the directors of the Company have resigned. The common shares of the Company were delisted from the Toronto Stock Exchange effective February 18, 2014 and the Frankfurt Stock Exchange effective February 27, 2014.
As a result of the Receivership Order and the Foreclosure, the Company is in default under the 2012 Transaction Documents. Accordingly, the Remaining Principal Amount is immediately due and payable. Pursuant to the terms of the 2012 Transaction Documents, HCP may acquire 109,476,312 common shares of the Company upon conversion of the Remaining Principal Amount at a conversion price of US$0.018 (being the US Dollar equivalent of CDN$0.01975, based on the Bank of Canada noon rate on January 8, 2014) per common share of the Company, or 57.7% of the total number of issued and outstanding common shares of the Company.
If the Remaining Principal Amount is fully converted, and all 5,040,000 of the common share purchase warrants currently held by HCP are exercised, HCP would hold 114,516,312 common shares of the Company, or 60.4% of the total number of issued and outstanding common shares of the Company.
HCP may or may not purchase or sell securities of the Company in the future in private transactions or otherwise, depending on factors material to HCP's investment decisions and reserves the right to dispose of any or all of its securities in private transactions or otherwise at any time and from time to time and to engage in hedging or similar transactions with respect to the securities.
HCP has filed an early warning report on SEDAR. A copy of the report may be obtained by contacting Jordan Jasser at (212) 751.8802.
ABOUT HALE CAPITAL PARTNERS
Based in New York City, Hale Capital Partners has established itself as a leading private equity firm focused on strategic investments in public companies and their subsidiaries. Hale Capital Partners' team is comprised of seasoned private equity veterans and entrepreneurs, who bring not only deep domain expertise but also hands-on operating experience to help build successful companies. Hale Capital Partners' mining portfolio spans all stages of mine development from exploration to commercial production.
No securities regulator has reviewed or accepts responsibility for the adequacy or accuracy of the contents of this news release.
SOURCE: Hale Capital Partners
For further information: HCP's contact information is as follows: Hale Capital Partners, L.P., 17 State Street, Suite 3230, New York, NY 10004, Attn: Jordan Jasser