HALIFAX, Nov. 14, 2013 /CNW/ - Clarke Inc. ("Clarke" or the "Company")
(TSX: CKI CKI.DB.A) announced today that it intends to seek the
approval of the holders ("Debentureholders") of its 6.00% convertible
unsecured subordinated debentures due December 31, 2018 (the
"Debentures") to amend the terms of the Debentures at a meeting to be
held on December 20, 2013 (the "Meeting").
The proposed amendments to the Debentures (the "Proposed Amendments")
INCREASING the interest rate on the Debentures from 6.00% to 6.50%.
ELIMINATING the ability of the Debentureholders to convert the
Debentures into common shares of the Company.
Clarke believes the Proposed Amendments have the following advantages:
Increased interest rate. Clarke believes that increasing the interest rate on the Debentures
from 6.00% to 6.50% represents an attractive opportunity for
Debentureholders to generate additional interest income, especially in
the current low interest rate environment, and in light of other
reinvestment opportunities available.
Consent fee. Debentureholders that vote in favour of the proposed amendments will
receive a consent fee of 25 basis points or $2.50 per $1000 principal
amount of Debentures and brokers will receive a broker fee of 75 basis
points or $7.50 per $1000 principal amount of Debentures.
Clarke has the financial capacity to redeem the Debentures at this time.
Clarke believes that doing so would result in Debentureholders losing
an attractive and recurring source of income. Clarke currently has
cash availability and marketable securities in excess of $135 million.
Clarke is permitted to draw down on its credit facilities and use the
proceeds of such facilities for general corporate purposes, including
redemption of the Debentures. The interest rates on such facilities are
substantially lower than the proposed increased interest rate on the
Clarke continuously evaluates and seeks to optimize the Company's
capital structure. Clarke's objective in this regard is to ensure that
the Company maintains its flexibility to pursue its investment strategy
and to continue to build value for all stakeholders. The proposed
amendments to the Debentures achieve these objectives for all
stakeholders at all levels of the Company's capital structure.
George Armoyan, CEO of Clarke, stated: "We believe that Clarke's
proposal to amend the Debentures represents an attractive opportunity
for Debentureholders to remain a financing partner of the Company at an
increased interest rate." Mr. Armoyan added: "In developing the
Proposed Amendments 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 all of our stakeholders and
The Company will pay a consent fee of $2.50 per $1,000 in respect of
such Debentures to Debentureholders, 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 Proposed Amendments. Concurrently with the payment of a consent
fee in respect of any Debentures, the Company will also pay a broker
fee of $7.50 per $1,000 principal amount of Debentures in respect of
such Debentures to brokers that are entitled to receive the fee.
The Board of Directors of the Company (the "Board") believes that the
Proposed Amendments provide a number of benefits to Clarke, its
shareholders and the Debentureholders. The Board UNANIMOUSLY RECOMMENDS
that the Debentureholders vote FOR the Amendments.
Further information with respect to the Proposed Amendments will be
outlined in a management information circular (the "Circular") expected
to be mailed to the Debentureholders in November 2013.
For the Proposed Amendments 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 vote in favour of the Proposed Amendments.
Detailed voting instructions will be found in the Circular. The Meeting
is scheduled to be held on December 20, 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 the
performance of such businesses and increase its return. Clarke's
securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for
more information about Clarke Inc., please visit our website at www.clarkeinc.com.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to certain forward-looking
statements relating, but not limited to, the Company's expectations,
intentions, plans and beliefs with respect to the Company. Often, but
not always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "does not expect", "is expected",
"budget", "estimates", "forecasts", "intends", "anticipates" or "does
not anticipate", or "believes", or equivalents or variations, including
negative variations, of such words and phrases, or state that certain
actions, events or results, "may", "could", "would", "should", "might"
or "will" be taken, occur or be achieved. Forward-looking statements
include, without limitation, those with respect to the future price of
securities held by the Company, changes in these securities holdings,
changes to the Company's hedging practices, currency fluctuations,
requirements for additional capital, changes to government regulations
and the timing and possible outcome of pending litigation.
Forward-looking statements rely on certain underlying assumptions that,
if not realized, can result in such forward-looking statements not
being achieved. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause the actual
results of the Company to be materially different from the historical
results or from any future results expressed or implied by such
With respect to the Company's Investment segment, such risks and
uncertainties include, without limitation, the Company's investment
strategy, legal and regulatory risks, general market risk, potential
lack of diversification in the Company's investments, reliance on
certain key executives, interest rates and foreign currency
fluctuations and other factors. With respect to the Company's Freight
Transportation segment, such risks and uncertainties include, without
limitation, competition, expiry of certain leases, labour relations,
the use of third party service providers, dependence on certain
personnel, fuel costs, weather conditions, customer relationships,
claims, litigation and insurance, government regulation of the
transport industry and other factors. With respect to the Company's
Commercial Tanks & Home Heating segment, such risks and uncertainties
include, without limitation, the costs of housing and major consumer
products, energy costs, alternative energy sources, steel costs,
product liability claims, foreign exchange risk, and other factors.
Other general risks and uncertainties include, without limitation,
environmental considerations, use of information technology and
information systems, safety issues, concentration of sales among a
small number of customers, the seasonality of business cycles for
certain segments, commodity market risk, risks associated with
investment in derivative instruments and other factors.
Although the Company has attempted to identify important factors that
could cause actions, events or results not to be as estimated or
intended, there can be no assurance that forward-looking statements
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Other than
as required by applicable Canadian securities laws, the Company does
not update or revise any such forward-looking statements to reflect
events or circumstances after the date of this document or to reflect
the occurrence of unanticipated events. Accordingly, readers should not
place undue reliance on forward-looking statements.
SOURCE: Clarke Inc.
For further information:
Chief Financial Officer
Telephone: (902) 442-3987