Initiatives to Strengthen Balance Sheet through a Proposed Debt to
Equity Conversion and Rights Offe
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ Press Release - August 17, 2009 Crew Gold Announces Initiatives to Strengthen Balance Sheet through a Proposed Debt-to-Equity Conversion and Rights OfferingLONDON, United Kingdom: Crew Gold Corporation ("Crew" or "theCompany") (TSX: CRU) (OSE: CRU) today announced initiatives tostrengthen its balance sheet, including the proposed conversion intocommon shares (the "Debt-for-Equity Conversion") of approximatelyUS$148 million principal amount of bonds ("Bonds") issued by Crew anda rights offering (the "Rights Offering") pursuant to which theCompany intends to issue subscription rights ("Rights") that willentitle holders of common shares to purchase up to 90 million commonshares of Crew for an aggregate purchase price of NOK 90 million(collectively, the "Restructuring"). Crew has appointed ArcticSecurities ASA ("Arctic Securities") as sole lead manager withrespect to the Rights Offering and as financial advisor with respectto the Debt-for-Equity Conversion."As a result of previously announced delays in reaching fullproduction capacity at the Lefa gold mine in Guinea, we believe thatit is in the best interests of the Company to reduce its financialleverage," said Jens Ulltveit-Moe, Chairman. "This restructuring isdesigned to significantly improve the Company's capital structure andto provide the Company with greater flexibility to execute itsbusiness plan and explore strategic alternatives."Following completion of the proposed Debt for Equity Conversion andthe Rights Offering, the holders of the Bonds being converted intocommon shares (the "Bondholders") will hold, in the aggregate, 53% ofthe Company's outstanding common shares with existing shareholdersand those who exercise Rights holding the balance. In recognition ofthe significant ownership interest to be acquired by Bondholdersunder the Restructuring, the Company will appoint four individuals,nominated by its principal bondholders, to its board of directorsupon completion of the Restructuring, while increasing the number ofdirectors from seven to eight. The four new directors will be RobertByford, Mitchell Gropper, Gordon Lawson and Jan Oksum. The newdirectors will join Mr. Ulltveit-Moe, who will remain Chairman,Cameron Belsher, Richard Robinson and Tom Ruud.Debt-for-Equity ConversionCrew currently has approximately US$99.8 million principal amount ofsenior secured bonds due March 30, 2011 (the "Senior Secured Bonds")outstanding, US$193.5 million principal amount of unsecuredconvertible bonds due December 1, 2010 (the "Convertible Bonds")outstanding and US$20.2 million principal amount of senior unsecuredbonds due October 27, 2009 (the "Unsecured Bonds") outstanding.Under the proposed Debt-for-Equity Conversion, Crew will convert intocommon shares:* 20% of the outstanding principal amount of the Senior Secured Bonds (US$20.0 million)* 60% of the outstanding principal amount of the Convertible Bonds (US$116.1 million)* 60% of the outstanding principal amount of the Unsecured Bonds (US$12.1 million)Following completion of the proposed Debt-for-Equity Conversion, Crewwill have approximately US$79.9 million principal amount of SeniorSecured Bonds, US$77.4 million principal amount of Convertible Bondsand US$8.1 million principal amount of Unsecured Bonds outstanding.The aggregate number of common shares issued to Bondholders under theDebt-for-Equity Conversion will be the number of common sharesrequired to be issued to ensure that the Bondholders have anaggregate ownership interest of 53% following completion of theRestructuring. As the number of common shares required to be issuedto Bondholders will depend on the number of common shares issued inthe Rights Offering, the conversion price for the Debt-for-EquityConversion will not be calculated until the Rights Offering iscompleted. Depending on the number of common shares issued in theRights Offering, the conversion price for any portion of the bondsdenominated in NOK will range from NOK 4.02 to NOK 4.61 and theconversion price for any portion of the Bonds denominated in US$ willrange from US$0.67 to US$0.76.The proposed Debt-for-Equity Conversion is subject to the separateapproval of (i) the holders of the Senior Secured Bonds, (ii) theholders of the NOK-denominated tranche of the Convertible Bonds,(iii) the holders of the US$-denominated tranche of the ConvertibleBonds and (iv) the holders of the Unsecured Bonds. In each case, theproposed transaction must be approved by 2/3 of Bondholdersrepresented in person or by proxy at the applicable Bondholdermeeting. Crew has entered into voting support agreements with themost significant holders of the Senior Secured Bonds and ConvertibleBonds.It is anticipated that a Notice to Bondholders of the meetings to beheld to consider the Restructuring containing full details of theRestructuring will be mailed and posted on the Company's websiteearly next week. The Bondholders' meetings are expected to be heldprior to the end of August.Rights OfferingUnder the terms of the proposed Rights Offering, shareholders willreceive 0.8417 Rights for each common share held. For every one Rightheld, holders of Rights will be entitled to subscribe for one commonshare at a subscription price of NOK 1.00 per share. Shareholders whoexercise their subscription right in full will be granted anadditional right to subscribe for any common shares which are nototherwise subscribed for pursuant to the Rights Offering. Commonshares issued to shareholders who exercise their additionalsubscription right will be allocated on a pro rata basis.If the Rights Offering is fully subscribed, an aggregate of 90million common shares will be issued to holders of Rights. Under aguarantee agreement (the "Guarantee Agreement") which the Companywill enter into with its largest shareholder Umoe AS, Umoe AS willsubscribe for that number of common shares which is necessary toensure that a minimum of 65 million common shares are issued pursuantto the Rights Offering. Accordingly, the aggregate number of commonshares issued pursuant to the Rights Offering will range from 65million to 90 million and the aggregate subscription proceeds willrange from NOK 65 million to NOK 90 million. Proceeds from the RightsOffering will be used for capital expenditures at Lefa, includingrefurbishment of mobile equipment.The Company anticipates that only those shareholders of the Companywho are resident in the European Union and/or the European EconomicArea will be permitted to participate in the Rights Offering. TheRights will be fully transferrable and will be listed on the OsloStock Exchange during the subscription period. The common sharesunderlying the Rights are expected to be listed for trading on boththe Oslo Stock Exchange and the Toronto Stock Exchange, provided thatany common shares issued pursuant to the exercise of Rights may notbe transferred over the facilities of the Toronto Stock Exchange orto a Canadian resident for a period of four months and one dayfollowing the date of issuance. Provided that Rights that wouldotherwise have been issued to shareholders in ineligiblejurisdictions have an economic value exceeding their estimated salescosts, Arctic Securities will be authorized to sell such Rights anddistribute the proceeds of such sale to those shareholders.Formal commencement of the Rights Offering is subject to Bondholderapproval of the Debt-for-Equity Conversion and the approval of arights offering prospectus by the Oslo Stock Exchange. The Companyintends to file a rights offering prospectus with the Oslo StockExchange as soon as reasonably practical after the requiredBondholder approvals are obtained.Crew anticipates that the first business day after the requiredBondholder approvals are obtained will be the last day that commonshares are traded inclusive of Rights. Thus, the Company expects thecommon shares to be traded exclusive of Rights on the Oslo StockExchange from and including the second business day after therequired Bondholder approvals have been obtained.Ownership of Common Shares Following the RestructuringFollowing completion of the Restructuring, funds managed by GLGPartners will in the aggregate own approximately 18.3% of Crew'soutstanding common shares. It is anticipated that no other Bondholderwill beneficially own, or exercise control or direction over, morethan 4% of the Crew's outstanding common shares following completionof the Restructuring.The balance of the common shares outstanding following completion ofthe Restructuring will be held by the existing shareholders of theCompany and investors who participate in the Rights Offering.Depending on the size of the Rights Offering, common shares issuedand outstanding as of the date hereof will represent from 25.5% to29.2% of the post-Restructuring common shares and common sharesissued pursuant to the exercise of Rights will represent from 17.8%to 21.5% of the post-Restructuring common shares.Umoe AS currently holds approximately 36.8% of the Company's issuedand outstanding common shares. If the Rights Offering is fullysubscribed and Umoe AS participates on a pro rata basis only, UmoeAS's ownership interest will be reduced to 17.3%. If the RightsOffering is less than fully subscribed and Umoe AS acquires sharespursuant to the additional subscription right or the GuaranteeAgreement, the decrease in Umoe AS's ownership interest resultingfrom the Debt-for-Equity Conversion will not be as significant.The closing of the Rights Offering and the Debt-for-Equity Conversionare subject to customary closing conditions and the receipt ofnecessary regulatory approvals, including the approval of the OsloStock Exchange and the Toronto Stock Exchange.Information About Proposed New DirectorsRobert Byford (Vancouver, Canada) recently retired from KPMG inVancouver after 39 years with the firm, having served in variousroles including as founding partner of its Corporate FinancePractice. He has advised clients from many industries on corporatefinance matters including equity and debt capital raising, capitalrestructuring, mergers, buyouts and alliances. He is also a frequentspeaker on corporate governance matters and disclosure controls andprocedures, and has served in a number of other roles including as anelected governor of the Vancouver Stock Exchange and as an advisor tothe British Columbia Securities Commission.Mitchell Gropper (Vancouver, Canada) is lawyer and a partner withFarris in Vancouver having previously spent 28 years with McCarthyTétrault (including serving as Managing Partner for two years) andprior to that having spent three years as a professor in the Facultyof Law at Western University in London, Ontario. He has an activepractice, often giving advice to boards of directors and independentcommittees of boards of directors; corporations and directors in"going private" transactions; and mergers and acquisitions of publicand private corporations. Mr. Gropper has served as a director ofvarious public and private corporations.Gordon Lawson (London, England) has worked in the City for over 30years, including acting as head of equity proprietary trading and amember or the European Management Board at Salomon Brothers /Citigroup and then as a founding partner of Pendragon Capital. He iscurrently on the board of various funds and listed companies and anadvisor to several hedge funds and funds of funds. He is also aJustice of the Peace and holds an MBA from Cranfield BusinessSchool.Jan Oksum (Oslo, Norway) was President and CEO of NorskeSkogindustrier ASA until 2006 having been with the company since 1979in a variety of roles. He also serves and has served as a directorof various other companies both listed and private.William LeClairInterim CEOSafe Harbour StatementCertain statements contained herein that are not statements ofhistorical fact may constitute forward-looking statements and aremade pursuant to applicable and relevant national legislation(including the Safe-Harbour provisions of the United States PrivateSecurities Litigation Reform Act of 1995) in countries where Crew isconducting business and/or investor relations. Forward-lookingstatements include, without limitation, those with respect to (1) thecompletion of the Restructuring, (2) the process, terms and timing ofthe Restructuring, (3) the intended use of the proceeds of the RightsOffering, (4) the expected actions of third parties named in thispress release, (5) the expected impact of the Restructuring on Crew'scapital structure and (6) the expected benefits of the Restructuring.The words "expect", "anticipate", "will", "believe" and "may", andother similar expressions, are often used to identify forward-lookingstatements.Forward-looking statements involve known and unknown risks,uncertainties and other factors that could cause actual events orresults to be materially different from the events or resultsexpressed or implied by such forward-looking statements. Inevaluating these statements, prospective purchasers shouldspecifically consider various factors that may cause actual events orresults to be materially different from the events or resultsexpressed or implied by such forward-looking statements. Risk factorsthat could impact the Restructuring or the expected benefits of theRestructuring include, without limitation, (1) the actual results ofcurrent exploration activities, (2) conclusions of economicevaluations, (3) changes in project parameters as plans continue tobe refined, (4) possible variations in grade and ore densities orrecovery rates, (5) failure of plant, equipment or processes tooperate as anticipated, (6) accidents, labour disputes and otherrisks of the mining industry, (7) delays in obtaining governmentapprovals or financing or in completion of development orconstruction activities and (8) risks and uncertainties existing inworld capital markets generally. Although Crew has attempted toidentify important factors that could cause actual events or resultsto differ from those described in forward-looking statementscontained herein, there can be no assurance that the forward-lookingstatements will prove to be accurate as actual events or resultscould differ materially from those anticipated in such statements.The material factors and assumptions used to develop forward-lookingstatements include, without limitation, (1) there being nosignificant disruptions affecting operations, whether due to labourdisruptions, supply disruptions, damage to equipment or otherwise,(2) continued development, operation and production at LEFA and Macoconsistent with our current expectations, (3) foreign exchange ratesamong the currencies that Crew does business in being approximatelyconsistent with current levels, (4) certain price assumptions forgold, (5) prices for electricity, fuel oil and other key suppliesremaining consistent with current levels, (6) production forecastsmeeting expectations, (7) the accuracy of our current mineral reserveand mineral resource estimates and (8) materials and labour costsincreasing on a basis consistent with our expectations.Except as may be required by applicable law or stock exchangeregulation, the Company undertakes no obligation to update publiclyor release any revisions to these forward-looking statements toreflect events or circumstances after the date of this document or toreflect the occurrence of unanticipated events. Accordingly, readersshould not place undue reliance on forward-looking statements.http://hugin.info/90/R/1335115/317193.pdf --- End of Message ---Crew Gold CorporationAbbey House, Wellington Way, Weybridge Surrey United KingdomWKN: 226534105 ; ISIN: CA2265344028; ;
Datum: 17.08.2009 - 09:08 Uhr
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