VANCOUVER, Sept. 17, 2013 /CNW/ - Further to its press release dated February 1, 2013, TG Residential Value Property Ltd. (TSXV: TG.P) (the "Company" or "TG"), a Vancouver-based Capital Pool Company listed on the TSX Venture Exchange (the "Exchange"), has appointed MGI Securities Inc. ("MGI") as its exclusive agent for a brokered private placement of units consisting of convertible debentures and warrants (the "Debenture Units") using the "Accredited Investor" exemption (the "Debenture Financing").
The terms of the Debenture Financing are as follows:
Issue: 3,400 Debenture Units, each Debenture Unit consisting of a $1,000 principal amount convertible debenture (each a "Convertible Debenture") plus 4,000 common share purchase warrants (each a "Warrant").
Price: $900 per Debenture Unit.
|Term: Three years (the "Term"), commencing on the issuance of the Convertible Debentures and ending on the date that is 3 years after the date of such issuance.|
|Coupon: 10 % per annum payable quarterly, commencing September 30, 2014.|
|Yield to maturity: 11.11%|
|Conversion: Each Convertible Debenture will be convertible into 4,000 common shares of the Company during the Term, unless the Company completes a new issue of common shares at a price that is less than $0.20 per common share (adjusted for any consolidation or roll-back) during the Term, in which case the conversion price will be adjusted down pro-rata to maintain a 25% conversion premium, subject to a minimum Conversion Price of $0.105.|
|Example: TG completes a new issue at $0.16, conversion price is adjusted to $0.16 x 125% = $0.20 and the conversion for each Convertible Debenture is adjusted to 5,000 common shares.|
|Security: The Convertible Debentures will be secured by a subordinated charge in the form of a General Security Agreement ("GSA") on the assets of TG, including the shares of any TG subsidiaries. The GSA will be subordinate to any mortgages on real estate assets and any bank operating line of credit on all other assets. The Company will also allow the Convertible Debenture holders to place a caveat on the Company's Penthouse Building in Winnipeg, Manitoba.|
Warrants: Each Warrant will be exercisable to purchase one common share of the Company at a price of $0.30 per share for a period of three years from the date of issuance. The Warrants will be subject to an accelerated expiry date if the Company's common shares trade at $0.40 or above for a period of 20 consecutive trading days after the date that is 12 months after the issuance of the Warrants.
Agent's Commission: The Company will pay MGI up to an 8% cash commission and issue to MGI up to 8% in options (the "Agent's Compensation Options") calculated on the aggregate amount of the proceeds raised pursuant to the Debenture Financing, which aggregate proceeds are to be calculated on the purchase price of the Debenture Units, not the par value.
Each Agent's Compensation Option entitles the Agent to purchase one unit of the Company (an "Agent's Unit") at $0.225 per Agent's Unit at any time prior to the date that is 36 months from the date of issuance of the Agent's Compensation Options.
Each Agent's Unit shall be comprised of one common share of the Company (an "Agent's Unit Share") and one common share purchase warrant of the Company (an "Agent's Warrant"). Each Agent's Warrant shall entitle the holder thereof to purchase one additional common share of the Company (an "Agent's Warrant Share") at an exercise price of $0.30 per Agent's Warrant Share for a period of 36 months from the date of issuance of the Agent's Compensation Options.
The Debenture Financing is in addition to the previously announced subscription receipt financing (the "Subscription Receipt Financing") which the Company anticipates will be adjusted to between $1,000,000 and $1,500,000 in gross proceeds.
The Subscription Receipt Financing and the Debenture Financing shall close concurrently on September 27, 2013, or such other date as the Company and MGI shall agree.
Completion of the Debenture Financing is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the Debenture Financing will be completed as proposed or at all.
The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Trading in the Company's common shares on the Exchange will remain halted pending completion of its previously announced Qualifying Transaction.
ON BEHALF OF TG RESIDENTIAL VALUE PROPERTIES INC.
President, Chief Executive Officer and Director
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release includes "forward-looking information" within the meaning of applicable Canadian securities laws, including information regarding the Debenture Financing and the Subscription Receipt Financing. Users of forward-looking information are cautioned that actual results may vary from the forward-looking information disclosed in this press release. The material risk factors that could cause actual results to differ materially from the forward-looking information contained in this press release include, risks related to Exchange approval of the Debenture Financing and the risk that there are not sufficient subscriptions for the Debenture Financing and/or the Subscription Receipt Financing. The forward-looking information contained in this press release represents management's best judgment of future events based on information currently available. The material assumptions used to develop the forward-looking information include that Exchange approval of the Debenture Financing will be obtained and that there are sufficient subscriptions for the Debenture Financing and the Subscription Receipt Financing. The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.
SOURCE: TG Residential Value Properties Ltd.
For further information:
contact: Douglas Thiessen at 604-558-2500