TORONTO, July 6 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV: TSX) announces that, further to its announcement of June 11, 2010, it has completed a $15 million brokered private placement of secured bonds (the "Bonds") with an 8% coupon and a term of five years plus one day. The bondholders have been issued an aggregate of 180,000 common share purchase warrants (the "Warrants") with an exercise price of $15.00 per share and a term of five years, representing 12,000 Warrants for each $1 million of Bonds issued.
Jovian has used part of the proceeds of this transaction to repay the remaining portion of its $15 million credit facility with Edco Capital Corporation ("Edco"), a corporation controlled by Jovian insider N. Murray Edwards, which would have come due on April 1, 2011. Edco has subscribed for $5 million of Bonds as part of this transaction and, as a result, has received 60,000 Warrants.
Mr. Edwards controls, directly and indirectly: 2,491,472 common shares of Jovian (approximately 29.27% of the issued and outstanding common shares of Jovian); $5 million principal amount of Bonds (representing 33.3% of the Bonds) and 60,000 Warrants (representing 33.3% of the Warrants); $5 million principal amount of convertible debentures (representing 50% of such convertible debentures), with a conversion price of $13.00 per share; and 150,000 common share purchase warrants of Jovian previously issued as part of the $15 million credit facility (the "Old Warrants") (representing 100% of the Old Warrants), 75,000 of which have an exercise price of $6.00 per share and 75,000 of which have an exercise price of $16.00 per share. If the $5 million principal amount of convertible debentures were converted and all of the Warrants and Old Warrants were exercised, Mr. Edwards would control, directly or indirectly, an additional 594,615 common shares and, as a result, would control, directly or indirectly, approximately 33.89% of the issued and outstanding common shares of Jovian.
"We are pleased that this transaction, along with the recently completed issuance of $10 million in convertible debentures, has allowed us to replace $15 million in short-term financing with $25 million in long term debt, while adding about $9 million to our treasury," said Philip Armstrong, CEO of Jovian. "This not only provides us with greater flexibility, but the lower interest rates associated with this new long term debt means that the total carrying cost is comparable as well, all of which strengthens our balance sheet."
Edco has subscribed for its Bonds for investment purposes. Mr. Edwards may acquire, directly or indirectly, additional securities of Jovian from time to time depending on market conditions.
About Jovian Capital Corporation (www.joviancapital.com)
Jovian acquires, creates and grows financial services companies specializing in wealth and asset management. The Jovian group of companies (AlphaPro Management Inc., BetaPro Management Inc., Horizons Exchange Traded Funds Inc., Hahn Investment Stewards & Company Inc., Horizons Funds Inc., JovFunds Management Inc., JovInvestment Management Inc., Leon Frazer & Associates Inc., MGI Financial Inc., MGI Securities Inc., MGI Securities (USA) Inc. and T.E. Wealth) manages $11.5 billion of client assets ($6.5 billion in assets under management and $5.0 billion in assets under administration). Additional information is available at www.sedar.com.
SOURCE Jovian Capital Corporation
For further information: For further information: Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or Philip Armstrong, Chief Executive Officer, Jovian Capital Corporation, (416) 933-5752