CALGARY, Jan. 9, 2017 /CNW/ - Mosaic Capital Corporation ("Mosaic") (TSX-V Symbols: M, M.PR.A and M.DB) announced today that, further to Mosaic's news release dated December 22, 2016 announcing that Mosaic had entered into an agreement pursuant to which Fairfax Financial Holdings Limited through certain of its subsidiaries has agreed to invest $150,000,000 in Mosaic on a private placement basis (the "Offering"), the completion of the Offering is expected to occur in late January 2017. Subject to the closing of the Offering, all of Mosaic's outstanding 10% unsecured subordinated perpetual preferred securities (the "10% Preferred Securities") and series A preferred shares (the "Series A Shares") will be redeemed on February 10, 2017 (the "Redemption Date") and all of Mosaic's outstanding 9.25% private yield securities (the "Private Yield Securities") will be retracted on the Redemption Date. Upon completion of the retraction of the Private Yield Securities, all outstanding warrants to purchase Private Yield Securities will expire in accordance with their terms.
Applicable notices have been delivered to the trustees in respect of the redemption of the 10% Preferred Securities and the retraction of the Private Yield Securities.
On the Redemption Date, the following amounts will be payable by Mosaic in respect of the redemption of the 10% Preferred Securities and Series A Shares and the retraction of the Private Yield Securities:
- $10.1096 for each $10 principal amount of 10% Preferred Securities for an aggregate redemption cost of approximately $105 million;
- $1,010.137 for each $1,000 principal amount of Private Yield Securities for an aggregate retraction cost of approximately $26.5 million; and
- $10.1096 for each Series A Share for an aggregate redemption cost of approximately $0.9 million.
Payment of the applicable redemption and retraction amounts for the 10% Preferred Securities and Private Yield Securities will be made to registered holders of such securities on or after the Redemption Date upon surrender to the applicable trustee of the certificates representing such securities. Payment of the applicable redemption and retraction amounts will be made to beneficial holders of the 10% Preferred Securities and Private Yield Securities held with brokers and financial institutions who are participants in CDS Clearing and Depository Services (CDS) through such participants and will be governed by standing customer instructions between the beneficial holder and the relevant participant and by customary practices.
Liquidity Option for Holders of Convertible Debentures
The closing price of Mosaic's outstanding 7% convertible unsecured senior subordinated debentures (the "Debentures") on the date Mosaic first announced the Offering, being December 22, 2016, was $99.00 per Debenture. Given that the most recent closing price of the Debentures was $111.51, the board of directors of Mosaic has determined that there would be little, if any, benefit to providing the holders of Debentures with a liquidity option based on the issue price of the Debentures plus accrued and unpaid interest (as previously contemplated). Accordingly, Mosaic does not currently intend to provide such a liquidity option for holders of the Debentures.
ABOUT MOSAIC CAPITAL CORPORATION
Mosaic is a Canadian investment company that owns a portfolio of established businesses which span a diverse range of industries and geographies. Mosaic's strategy is to create long-term value for its shareholders through accretive acquisitions, long-term portfolio ownership, sustained cash flows and organic portfolio growth. Mosaic achieves its objectives by maintaining financial discipline, acquiring businesses at attractive valuations, performing extensive acquisition due diligence, utilizing creative transaction structuring and working closely with subsidiary businesses after acquisition.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as "forward-looking statements") that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this news release which are not statements of historical fact may be forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements. In particular, forward-looking statements in this news release include, but are not limited to: statements with respect to the timing and amount of payment for the redemption of the 10% Preferred Securities and Series A Shares; the timing and amount of payment for the retraction of the Private Yield Securities; the anticipated closing date of the Offering; and Mosaic's intention not to provide a liquidity option for holders of the Debentures. Such statements or information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties.
Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions and other forward-looking statements will not occur. Some of the assumptions made by Mosaic, upon which such forward-looking statements are based include, but are not limited to: the satisfactory timing and receipt of the approval of the TSX Venture Exchange with respect to the Offering; the successful completion of the Offering; future market conditions will not be materially different than anticipated by Mosaic; there will be no material changes to government and environmental regulations affecting Mosaic or its operations; and the business operations of the operating businesses of Mosaic will continue on a basis consistent with prior years.
A number of factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to: the inability to settle definitive documentation and closing conditions of the Offering, including accuracy of representations and warranties not being satisfied; the inability to obtain approval from the TSX Venture Exchange; prevailing economic conditions; unexpected changes in the financial markets (including in the trading price of the securities of Mosaic); and changes in the general economic and business conditions of one or more of Mosaic and its subsidiaries. Should any of the risks or uncertainties facing Mosaic and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by any forward-looking statements contained in this news release. Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in Mosaic's annual information form for the year ended December 31, 2015, a copy of which is available under Mosaic's profile on SEDAR (www.sedar.com).
Although Mosaic believes that the expectations represented by any forward-looking statements contained herein are reasonable based on the information available to it on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this news release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.
SOURCE MOSAIC CAPITAL CORPORATION
For further information: Allan Fowler, Chief Financial Officer, Mosaic Capital Corporation, 400, 2424 - 4th Street SW, Calgary, AB T2S 2T4, Tel: (403) 270-4663