Crew Gold Provides Details on Debt-for-Equity Restructuring Proposal
(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 - November 16, 2009Crew Gold Provides Details on Debt-for-Equity Restructuring ProposalLONDON, United Kingdom: ("Crew" or "the Company") (TSX: CRU) (OSE:CRU) The Company wishes to provide additional details on the proposeddebt-for-equity restructuring (the "Restructuring") that wasannounced on October 28, 2009.Details of the Restructuring ProposalThe Company currently has approximately US$101.7 million principalamount of senior secured bonds due March 30, 2011 (the "SeniorSecured Bonds") outstanding, US$195.0 million principal amount ofunsecured convertible bonds due December 1, 2010 (the "ConvertibleBonds") outstanding, and US$21.8 million principal amount of seniorunsecured bonds (the "Unsecured Bonds") outstanding which were duefor repayment on October 27, 2009. The Restructuring will involvethe conversion of 50% of the outstanding principal of the SeniorSecured Bonds into common shares of the Company and the conversion of80% of the principal amount of the Convertible Bonds and UnsecuredBonds into common shares.The remaining 20% principal balance of the Unsecured Bonds and theConvertible Bonds, together with all accrued and unpaid interest upto and including the date of completion of the Restructuring will berolled into a new bond loan (the "New Bonds") which will: (i) have amaturity date of September 30, 2012, (ii) US dollar and NOKdenominated tranches so that each bondholder will hold bonds in thesame currency post-Restructuring as they did before, (iii) aninterest rate of 9.5% for the NOK tranche and 7.3% for the US dollartranche payable quarterly in arrears, (iv) the same security packageas the Senior Secured Bonds on a second priority basis after theSenior Secured Bonds, and (v) otherwise the same terms and conditionsas the Senior Secured Bonds. Accrued and unpaid interest on theSenior Secured Bonds being converted into common shares up to andincluding the date of completion of the Restructuring will be paid onthe next scheduled payment date.The Restructuring will include a number of amendments to the loanagreement for the Senior Secured Bonds, including an extension oftheir maturity date to September 30, 2011 and Crew's agreement toprocure on demand guarantees in favour of the loan trustee, NorskTillitsman ASA (the "Loan Trustee") from certain of Crew'ssubsidiaries in support of Crew's obligations under the SeniorSecured Bonds.As part of the Restructuring, the Company is also proposing thatIntex Resources ASA ("Intex") convert 80% of the principal ofUS$9,784,000 currently outstanding under the loan agreement betweenthe Company and Intex dated October 30, 2008 into common shares, andconvert the remaining 20% principal balance of this loan togetherwith all accrued and unpaid interest up to the date of completion ofthe Restructuring into the New Bonds.A summary of the amounts being converted and shareholdings of Crewfollowing completion of the Restructuring is approximately asfollows:+--------------------------------------------------------------------------+| | | | Number of | || | | | Common Shares | Ownership || | Amount | Amount | post |percentage post|| Loan | outstanding | converted | Restructuring | Restructuring ||--------------+-------------+-------------+---------------+---------------||Existing | | | | ||shareholders | N/A| N/A| 106,922,536| 5.00%||--------------+-------------+-------------+---------------+---------------||Unsecured | NOK| NOK| 152,600,595| ||Bonds | 122,000,000| 97,600,000| | 7.14%||--------------+-------------+-------------+---------------+---------------||Convertible | | | 148,848,122| ||Bonds, NOK | NOK| NOK| | ||Tranche | 119,000,000| 95,200,000| | 6.96%||--------------+-------------+-------------+---------------+---------------||Convertible | | | 1,217,293,108| ||Bonds, USD | USD| USD| | ||Tranche | 173,784,380| 139,027,504| | 56.92%||--------------+-------------+-------------+---------------+---------------||Senior Secured| | | 102,411,260| ||Bonds, NOK | NOK| NOK| | ||Tranche | 131,000,000| 65,500,000| | 4.79%||--------------+-------------+-------------+---------------+---------------||Senior Secured| | | 341,841,921| ||bonds, USD | USD| USD| | ||Tranche | 78,083,789| 39,041,895| | 15.99%||--------------+-------------+-------------+---------------+---------------||Intex Loan |USD 9,784,000|USD 7,827,200| 68,533,178| 3.20%||--------------+-------------+-------------+---------------+---------------||In total | | | 2,138,450,720| 100.00%|+--------------------------------------------------------------------------+In order to facilitate the Restructuring, the bondholders will beasked to instruct the Loan Trustee to not take action to declare theUnsecured Bonds in default or pursue collection thereof, and to nottake action to collect payment of interest on the Convertible Bondsuntil the earlier of (i) unless the Restructuring is approved by theholders of each issue of bonds, November 30, 2009, and (ii) January31, 2010.On the date of completion of the Restructuring, two of the currentmembers of the Company's Board of Directors will resign, and threenew appointees, Bob Byford, Mitchell Gropper and Gordon Lawson willbe appointed as directors of the Company.The new common shares issued as part of the Restructuring may not besold, transferred, hypothecated or otherwise traded through thefacilities of the Toronto Stock Exchange or otherwise in Canada or toor for the benefit of a Canadian resident for a period of four monthsplus one day from the date of issue. Until this restricted periodlapses, the new shares are expected to be registered under a separateISIN and listed on Oslo Børs. Immediately after the restrictedperiod has lapsed, such new shares will be registered under the sameISIN as the existing shares of the Company and listed for trading onthe Toronto Stock Exchange, subject to receipt of approval of theToronto Stock Exchange.Completion of the Restructuring is subject to the satisfaction orwaiver of a number of conditions, including approval: (i) either oftwo-thirds of the holders of each issue of bonds and of Intex or theadoption of a plan of arrangement or other statutory procedure underCanadian or Yukon Territory law that would accomplish theRestructuring, (ii) the loan agreement for the Senior Secured Bondsbeing amended as described above, (iii) the resignation of two of thecurrent five members of the Company's Board of Directors andappointment of Bob Byford, Mitchell Gropper and Gordon Lawson asdirectors, (iv) receipt of all required regulatory approvals,including approval of the Toronto Stock Exchange and Oslo Børs, and(v) completion of the Restructuring occurring no later than January31, 2010.When the Restructuring was first announced by the Company on October28, 2009, the Company anticipated that receipt of shareholderapproval would be a required condition of obtaining approval of theRestructuring from the TSX, however the Company has been advised bythe TSX that shareholder approval of the Restructuring is notrequired. As a result, shareholder approval of the Restructuring isnot a condition of its completion and the Company is cancelling theSpecial Shareholder Meeting previously called for December 15, 2009.Background to the RestructuringDuring the past year, the Company has been exploring alternatives torestructure its balance sheet and place itself in a position to meetits obligations to creditors. As a result of the many unexpecteddelays in reaching full production capacity at the LEFA gold minearising from the poor condition of the plant and the mining equipmentand the political instability in Guinea, among other things, theBoard of Directors of the Company concluded that it was in the bestinterests of the Company to reduce its financial leverage. Based onfeedback from the Company's financial advisor, Arctic Securities ASA,and the Company's largest shareholder, it became evident that raisingany new equity would be conditional upon a substantial restructuringof the Company's outstanding bonds. On August 17, 2009, the Companyannounced initiatives to strengthen its balance sheet, including aproposed conversion into common shares of approximately US$148million principal amount of bonds issued by the Company and a rightsoffering of up to NOK 90 million. This restructuring proposal wasapproved by the holders of the Company's Senior Secured Bonds andConvertible Bonds, but was rejected by the holders of the UnsecuredBonds. As a result, the Company continued to explore strategic andstructural alternatives to improve the Company's balance sheet andcreate a viable capital structure for the Company which more closelyaligns the interests of all stakeholders and attempted to ensure thatthe Company is in a position to meet its obligations as they becomedue, both in the near and longer term.To maintain a sufficient amount of working capital to progressoperations at the Company's core asset, the LEFA gold mine during2009 the Company engaged in a process of selling non-core assets,having sold all of the assets related to the Nalunaq gold mine, theCompany's interest in Apex Mining Company Inc. and other assets inthe Philippines, and the sale of the Nugget Pond processing facilityin Newfoundland, Canada.On October 12, 2009, the Company provided revised production guidancefor the final quarter of 2009 for the LEFA gold mine of 50,000 to65,000 ounces of gold and announced that since the return toproduction of the SAG Mill 01 in early October, the plant was runningat a rate of approximately 15,000 tonnes of ore per day. The Companyalso announced that it believed that a reliable production rate of18,000 tonnes per day was achievable provided that significantcapital expenditures were undertaken over the next three years,principally in connection with the Company's mining fleet and theacquisition of insurance spares to reduce the risk of lengthyrestrictions on capacity when there are equipment failures at theoperations. The Company also announced that it anticipated that itspreviously published proven and probable reserves for LEFA would bereduced, after taking into account depletion, by approximately 10%following completion of a new NI 43-101 reserve and resource reportwhich is now scheduled for completion in early December.On October 27, 2009, a NOK 122 million principal payment came due onthe Company's Unsecured Bonds, which to date remains unpaid as theCompany conserves cash for working capital and necessary capitalexpenditure purposes.Throughout this period, the Board of Directors, through the Chairmanand the Chief Executive Officer, conducted extensive negotiationswith certain of the Company's bondholders, and on October 28, 2009,the Company announced that it had reached an agreement in principlewith certain of the bondholders with respect to the terms of theRestructuring. The Board of Directors approved the Restructuringafter concluding that the Restructuring is in the best interests ofthe Company and after considering all factors that the Boardconsidered relevant, including but not limited to:* The Company is not presently in a position to make the required principal and interest payments under its bonds and maintain sufficient working capital for operations and necessary capital expenditures.* The Company's current levels of debt, current state of operations at LEFA, the need for significant additional capital expenditures and the political instability in Guinea, make it extremely difficult for the Company to raise equity to repay principal and interest on the Bonds when due and maintain sufficient working capital for operations and necessary capital expenditures.* Advice from the Company's bondholders that they have instructed the Trustee to commence enforcement proceedings should the Restructuring not be approved and the principal and interest due not be paid.* Formal insolvency proceedings would greatly prejudice the Company and its ability to carry on operations.* Following an exhaustive review of alternatives available to the Company, the Board's conclusion that the Restructuring represents the best terms that are available to the Board to restructure the capital of the Company.* The Restructuring will greatly improve the Company's financial strength and liquidity, which will allow the Company to continue to develop the LEFA gold mine.The bondholders meetings to consider and approve the Restructuringwill be held on November 24, 2009. The Summons to the BondholderMeetings was issued November 13, 2009 for these meetings, whichsummons contains further details regarding the proposedRestructuring. A copy of the summons will be available on theCompany's website.William LeClairChief Executive OfficerSafe 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. The words "expect","anticipate", "will", "believe" and "may", and other similarexpressions, are often used to identify forward-looking statements.Forward-looking statements included herein relate, but are notlimited to, statements regarding (1) the completion of the proposedRestructuring, (2) the expected impact of the Restructuring, (3) theresults of the resource and reserve reviewing currently underway atthe LEFA gold mine, and (4) expected shareholdings followingcompletion of the Restructuring.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 Company include, without limitation, risksrelating to (1) receipt of all necessary approvals of theRestructuring, (2) the actions of bondholders in enforcing theexisting terms of the bonds, (3) production levels at the LEFA goldmine. Although Crew has attempted to identify important factors thatcould cause actual events or results to differ from those describedin forward-looking statements contained herein, there can be noassurance that the forward-looking statements will prove to beaccurate as actual events or results could differ materially fromthose 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 LEFAconsistent 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, and (7) materials and labour costs increasingon 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/1355151/328840.pdf --- End of Message ---Crew Gold CorporationAbbey House, Wellington Way, Weybridge Surrey United KingdomWKN: 226534105 ; ISIN: CA2265344028; ;
Datum: 16.11.2009 - 07:42 Uhr
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