Victoria Square Ventures Inc. purchases convertible notes of Bellus Health Inc.



    MONTREAL, June 3 /CNW Telbec/ - Victoria Square Ventures Inc. ("VSVI")
announces that on June 3, 2009, VSVI acquired $5,500,000 principal amount of
senior convertible notes (the "Second Tranche Notes") of Bellus Health Inc.
("Bellus") due 5 years and one day from their date of issuance (the "Second
Tranche Maturity Date"). The Second Tranche Notes were acquired pursuant to an
agreement dated April 16, 2009 (the "Purchase Agreement"). Interest will be
capitalized on the Second Tranche Notes at the rate of 15% per year. The
principal and accrued interest on the Second Tranche Notes is convertible at
the option of the holder of the Second Tranche Notes into common shares of
Bellus at a conversion price of $0.20 per common share (subject to certain
adjustments) upon the Second Tranche Maturity Date or the occurrence of
certain other events.
    As consideration for VSVI subscribing for $5,000,000 principal amount of
senior convertible notes (the "First Tranche Notes") of Bellus on April 16,
2009 and for the Second Tranche Notes, Bellus has paid to VSVI a set up fee of
$307,500 in senior convertible notes (the "Set Up Fee Notes" and together with
the First Tranche Notes and Second Tranche Notes, the "New Notes").
    In the aggregate, the Second Tranche Notes and Set Up Fee Notes acquired
by VSVI on June 3, 2009 and the capitalized interest payable on such Second
Tranche Notes and Set Up Fee Notes, are convertible into an aggregate of
58,404,784 common shares of Bellus, which would represent approximately 53.9%
of the outstanding common shares of Bellus, assuming that the Second Trance
Notes and Set Up Fee Notes remain outstanding until the Second Tranche
Maturity Date, that all interest thereon is paid by the issuance of Bellus
common shares at $0.20 per share, but excluding any common shares of Bellus
issuable upon conversion or exercise of all other outstanding convertible
securities of Bellus.
    After completion of the transactions described above, VSVI currently owns
1,172,704 common shares of Bellus, 21,672,000 Series A 6% Cumulative
Convertible Preferred Shares of Bellus (the "Preferred Shares") and
$10,807,500 principal amount of New Notes.
    On December 18, 2008, Picchio Pharma Inc. ("Picchio") entered into
various agreements with its shareholders, VSVI and 1324286 Alberta Ltd.
("1324286"), a wholly owned subsidiary of the FMRC Family Trust (of which Dr.
Francesco Bellini, the Chairman, President and Chief Executive Officer of
Bellus is a beneficiary), under which all of the 11,450,429 shares of Bellus
held, directly or indirectly, by Picchio will be transferred to VSVI and
1324286. Pursuant to such agreements, the parties have agreed to cause
5,725,214 common shares of Bellus to be transferred by Picchio to VSVI and
5,725,215 common shares of Bellus to be transferred by Picchio to 1324286 by
no later than June 30, 2009 (collectively, the "Picchio Transfers"). Until the
common shares of Bellus are transferred by Picchio to VSVI, VSVI shall have no
ownership of and no rights to vote or receive dividends on such common shares.
    Assuming the conversion of: (i) the New Notes, (ii) the Preferred Shares,
(iii) the dividends payable on the Preferred Shares, and (iv) the interest
payable on the New Notes, VSVI and its joint actor, Picchio, would own an
aggregate of 150,423,847 common shares of Bellus, representing approximately
80.1% of the outstanding common shares of Bellus. The foregoing assumes that
the New Notes remain outstanding until their respective maturity dates, that
all interest thereon is paid by the issuance of Bellus common shares at $0.20
per share, that the Preferred Shares remain outstanding until maturity, the
Preferred Shares are converted in full on the basis of 1 common share for each
Preferred Share, that all dividends payable in respect of the Preferred Shares
are paid by the issuance of common shares at an assumed market price of $0.35
per share, but excluding any common shares of Bellus issuable upon conversion
or exercise of all other outstanding convertible securities of Bellus
(collectively, the "Conversion Assumptions").
    Upon completion of the Picchio Transfers, after which Picchio will not
hold any shares of Bellus, and assuming the Conversion Assumptions and
conversion of: (i) the Preferred Shares, (ii) the dividends payable on the
Preferred Shares, (iii) the New Notes, and (iv) the interest payable on the
New Notes, VSVI would own an aggregate of 144,698,632 common shares of Bellus,
representing approximately 77.0% of the outstanding common shares of Bellus.
    If all of the other outstanding senior convertible notes and Series A 6%
Cumulative Convertible Preferred Shares of Bellus, and the interest and
dividends payable thereon, are converted on the same basis as above, VSVI and
its joint actor, Picchio, would own approximately 30% of the outstanding
common shares of Bellus or 29% after the Picchio Transfers.

    The transactions described in this press release were carried out
pursuant to private agreements.

    VSVI holds the Bellus common shares, the Preferred Shares and the New
Notes for investment purposes and, in accordance with applicable securities
laws, it may increase or decrease its investment in Bellus depending on market
conditions and other relevant factors. VSVI understands that Picchio may, in
accordance with applicable securities laws, trade in or with respect to
securities of Bellus depending on market conditions and other relevant
factors.




For further information:

For further information: Peter Kruyt, President and Chief Executive
Officer, Victoria Square Ventures Inc., (514) 286-7400

Organization Profile

VICTORIA SQUARE VENTURES INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890