CALGARY, ALBERTA -- (Marketwired) -- 03/20/17 -- Target Capital Inc. ("Target") (TSX VENTURE: TCI)(CSE: TCI)(CSE: TCI.CN) is pleased to announce that it has entered into multiple release and settlement agreements, bond exchange agreements and share purchase agreements pursuant to which:
-- Holders of outstanding Target bonds with an aggregate face value of less than $10,000, agree to settle and release Target with respect to all amounts owed with respect to such outstanding Target bonds in return for payment equal to the aggregate face value of the outstanding Target bonds; -- Holders of outstanding Target bonds with an aggregate face value greater than $10,000, agree to settle and release Target with respect to all amounts owed with respect to such outstanding Target bonds in return for the issuance of a new Target bond with a face value equal to 35% of the aggregate face value of the outstanding Target bonds held and a cash payment equal to 65% of the aggregate face value of the outstanding Target bonds held; -- The new Target bonds have no maturity date and bear simple interest at a rate of 1.25% per annum above the prime rate of Canadian Imperial Bank of Commerce in effect at the time that interest is calculated. Interest on the new Target bonds is to be paid on a quarterly basis. Target is also required to make a partial redemption payments with respect to the new Target bonds in the aggregate amount of $300,000 in the event that Target holds cash with a value greater than $400,000, as reported in its quarterly financial statements; -- Target currently holds 55,200 common shares of Olympia Financial Group Inc. ("OFGI") and has agreed to sell all of its OFGI common shares at $29.00 per common share of OFGI, for aggregate proceeds of $1,600,800. Proceeds from the sale of the OFGI common shares shall be used to fund the cash payments to be made to holders of outstanding Target bonds; -- Target currently holds 5,600 common shares of Bearspaw Tree Farm Inc. ("BTFI") and has agreed to sell all of its BTFI common shares at $80.00 per common share of BTFI, for aggregate proceeds of $448,000. Proceeds from the sale of the BTFI common shares shall be used to fund the cash payments to be made to holders of outstanding Target bonds; and -- The BTFI common shares were previously valued at $1,168,500 as reported in Target's Q3-2017 financial statements. Target recently became aware of a tender offer by BFTI to holders of BTFI common shares with a purchase price of $80 per BFTI common share. Target has adjusted its valuation of the BTFI common shares held to match the purchase price offered by BFTI to holders of BFTI common shares.
Following the completion of the transactions contemplated above, it is anticipated that:
-- Amounts owing with respect to all outstanding Target bonds shall be reduced from $5,117,500 to $1,981,700; -- Expected annual interest payment to holders of all outstanding Target bonds shall be reduced from $351,572 to $87,745; and -- Target shall no longer be entitled to any dividend payments declared with respect to OFGI common shares as they will have been sold.
The transactions described in this press release are subject the approval of the TSX Venture Exchange.
Target will issue a further press release upon completion of the transactions contemplated above.
Neither 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.
Statements Regarding Forward Looking Information
Certain portions of this press release as well as other public statements by Target contain "forward- looking information" within the meaning of applicable Canadian securities legislation, which is also referred to as "forward -looking statements", which may not be based on historical fact. Wherever possible, words such as "anticipates", "will", "plans," "expects," "targets," "continue", "estimates," "scheduled," "anticipates," "believes," "intends," "may," and similar expressions or statements that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, have been used to identify forward-looking information. Forward-looking statements contained in the Target's public disclosure include, without limitation, the Target's earnings expectations, fee income, expense levels, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, catastrophic events, and the Target's ability to complete strategic transactions and other factors. In addition, this news release contains forward looking statements relating to the closing of the transactions contemplated in the debt settlement agreements, bond exchange agreements and share purchase agreements as outlined above.
All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current interest rate and liquidity conditions affecting the Corporation and the Canadian economy. Certain material factors or assumptions are applied by the Corporation in making forward-looking statements, including without limitation, factors and assumptions regarding interest and foreign exchange rates, availability of key personnel, the effect of competition, government regulation of its business, computer failure or security breaches, future capital requirements, acceptance of its products in the marketplace, its operating cost structure, the current tax regime and the ability of the Corporation to obtain necessary third party and governmental approvals, as applicable.
Target Capital Inc.