CALGARY, Dec. 24 /CNW/ - Birch Mountain Resources Ltd. ("Birch Mountain"
or the "Company") (BMD: TSX and AMEX) has issued a $31.5 million principal
amount floating rate convertible senior secured debenture (the "Convertible
Debenture") to Tricap Partners Ltd. ("Tricap") in connection with refinancing
of the existing credit facility extended to the Company by an affiliate lender
of Tricap. Joel Jarding, Birch Mountain's President & COO states, "Tricap has
acquired the Convertible Debenture as an investment in Birch Mountain and we
welcome their proven industry and financial expertise in value creation."
The Convertible Debenture has a maturity date of June 30, 2012 and bears
an interest rate of prime rate plus 4.0%, calculated daily and compounded and
payable monthly. The initial principal amount of the Convertible Debenture is
convertible, at the election of Tricap, in whole or in part, into common
shares of the Company ("Common Shares"), at an exercise price equal to the
lower of (i) $0.80 per common share and, (ii) the then current market price,
subject to certain anti-dilution adjustments. Prior to December 31, 2008, the
Convertible Debenture is convertible only in the event of a change of control
of Birch Mountain or an event of default.
In addition, until approval by a majority of shareholders of Birch
Mountain is obtained (which the Company has agreed to use commercially
reasonable efforts to seek no later than June 11, 2008), Tricap may only
convert such portion of the Convertible Debenture that would not result in
Tricap holding more than 20% of the then outstanding Common Shares, except
upon the occurrence of a change of control event, whereby Tricap may exercise
the conversion right in full. Interest amounts owing on the Convertible
Debenture may also be converted into Common Shares at the election of Tricap.
The proceeds of the financing have been used to repay and replace the
existing senior secured bridge facility provided by Brookfield Bridge Lending
Fund Inc. to Birch Mountain and the expanded debt will be used to facilitate
ongoing value development.
The strategic review initiated by the Board of Directors in September
2007 is ongoing as the Company continues with its operational growth and
development of the Muskeg Valley Quarry and Hammerstone Project.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy the Convertible Debenture or Common Shares
within the United States. The Convertible Debenture or Common Shares have not
been and will not be registered under the United States Securities Act of
1933, as amended (the "1933 Act"), or any state securities laws. Accordingly,
the Convertible Debenture or the Common Shares may not be offered or sold in
the United States or to U.S. persons (as such terms are defined in
Regulation S under the 1933 Act) unless registered under the 1933 Act and
applicable state securities law or an exemption from such registration is
About Tricap Partners Ltd.
Tricap Partners Ltd. was established by Brookfield Asset Management to
provide long term patient capital to companies with potential for value
creation and need to recapitalize. With strong industry and financial
management expertise, Tricap is well positioned to assist these companies in
reaching their full potential.
Forward Looking Statements: This news release contains certain
forward-looking statements. All statements, other than statements of
historical fact, included herein, including without limitation, statements
regarding potential mineralization, resources and reserves, exploration and
development plans and results, anticipated capital expenditures and financing
thereof, anticipated outcomes and timing of regulatory applications and
approvals and the future plans and objectives of Birch Mountain are
forward-looking statements that involve various risks and uncertainties. There
can be no assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those anticipated in
such statements. Certain amounts in the financial statements are based on
estimates using the best currently available information and assumptions of
management. Important factors that could cause actual results to differ
materially from Birch Mountain's expectations are disclosed elsewhere in
documents that are available to the public at www.sedar.com and www.sec.gov.
For further information:
For further information: Birch Mountain Resources Ltd., Tel. (403)
262-1838, Fax (403) 263-9888, website: www.birchmountain.com