HALIFAX, July 17, 2012 /CNW/ - Clarke Inc. ("Clarke") (TSX: CKI
CKI.DB.A), in response to investor inquiries, is providing additional
information and clarification regarding the proposed amendments to its
6.0% convertible debentures of which there is $63 million outstanding
and mature on December 31, 2013 (the "Current Debentures") which was
announced by press release on June 19, 2012.
As a matter of good corporate governance, Clarke continuously evaluates
and seeks to optimise the company's capital structure. Clarke's
objective in this regard is to ensure that Clarke maintains its
flexibility to pursue its investment strategy and to continue to build
value for all its various securityholders. The proposed amendment to
the Current Debentures achieves these objectives and Clarke is
providing clarification in response to some investor inquiries.
Clarke currently has committed credit facilities and marketable
securities in excess of $125 million. Clarke is permitted to draw down
on its credit facilities and use the proceeds of such facilities for
general corporate purposes, including to redeem the Current Debentures.
The interest rates on such facilities are substantially lower than the
interest rate on the Current Debentures.
George Armoyan, CEO of Clarke, stated: "Some of our debentureholders
have inquired as to why Clarke is pursuing these amendments." Mr.
Armoyan added: "While Clarke is currently able to borrow funds at a
substantially lower cost than under its existing debentures, these
debentures do give the company increased flexibility to execute on its
investment strategy. Rather than using available credit facilities or
raising new capital to redeem our existing debentures, we wanted to
reach out to our existing debentureholders and invite them to remain a
financing partner of Clarke for another five years at an attractive
interest rate. We also decided to offer a consent fee to those
debentures that vote in favour of the debenture amendments and continue
to support Clarke in its business initiatives."
The advantages of the proposed amendments include the following:
Clarke believes that the 6.0% interest rate on the Current Debentures
represents an attractive yield, especially in the current low interest
rate environment and in light of other reinvestment opportunities
Clarke has committed credit facilities and marketable securities in
excess of $125 million. Clarke is permitted to draw down on its
facilities and use the proceeds to redeem the Current Debentures. Doing
so would result in the holders of the Current Debentures losing an
attractive and recurring source of income.
Holders of the Current Debentures that vote in favour of the proposed
amendments will receive a consent fee of 60 basis points or $6 per
$1,000 principal amount of Current Debentures. Financial advisors of
debentureholders that vote in favour of the proposed amendments will
receive a consent fee of 40 basis points or $4 per $1,000 principal
amount of Current Debentures.
Accordingly, Clarke encourages holders of the Current Debentures to vote
in favour of the proposed amendments. Holders of the Current Debentures can vote in favour of the proposed
amendments by internet or by telephone or by contacting their brokers
or investment advisors on or before July 23, 2012.
Further information with respect to the proposed amendments is outlined
in a management information circular which has been mailed to the
holders of the Current Debentures and is available under Clarke's
profile on SEDAR at www.sedar.com or www.clarkeinc.com.
Halifax-based Clarke invests in a variety of private and publicly-traded
businesses and participates actively where necessary to enhance
performance and increase 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, Clarke's expectations,
intentions, plans and beliefs with respect to Clarke. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "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, statements relating to Clarke's beliefs regarding
the benefits of the proposed amendments to the Current Debentures,
Clarke's ability to redeem all or part of the Current Debentures and
the effects of any such redemption on the holders of the Current
Debentures, and the potential uses of Clarke's credit facility.
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 to be materially different from the results expressed or
implied by such forward-looking statements and there can be no
assurance that such statements will prove to be accurate. Other than as
required by applicable Canadian securities laws, Clarke does not intend
to 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, Clarke Inc.
Telephone: (902) 442-3000