Asia Pacific extends convertible debentures
Asia Pacific Resources Ltd APQ
Shares issued 54,399,705 2000-06-26 close $1.66
Tuesday Jun 27 2000
Mr. Gerald Wright reports
Asia Pacific Resources has negotiated an extension to the maturity date of its 10-per-cent secured convertible debentures (July/August, 1998). By agreement, the maturity date for the debentures has been extended to Oct. 13, 2001.
The principal amount of the debentures is $24.46-million (U.S.), and the estimated sum due to debenture holders on the original maturity date (Aug. 13, 2000) would have been $31.749-million. At the new maturity date (Oct. 13, 2001), the estimated sum due to debenture holders will be $37.083-million. As before, no cash payments are due to debenture holders prior to maturity.
As consideration for the granting of this extension, debenture holders will be entitled to convert the debt due at any time for common shares in Asia Pacific Resources Ltd. at a conversion price of $2.32 (U.S.) (or $3.43 (Canadian) at the current exchange rate) per share. If conversion occurs on or before the new maturity date, up to 16 million shares may be issued, representing approximately 20.2 per cent of the then, fully diluted common shares of the company. This is subject to the approval of shareholders at the company's Aug. 9, 2000, annual general meeting and the appropriate regulatory bodies.
If the necessary shareholders' approval is not obtained, on conversion of any debentures, any portion not satisfied through the issuance of shares will be payable in cash, the amount of which will be equal to the number of additional shares the debenture holder would have received on conversion if able to convert all of its debentures multiplied by the weighted average trading price of Asia Pacific shares on the Toronto Stock Exchange on the day notice of conversion is given.
The funds initially received from the debenture holders enabled Asia Pacific Resources Ltd. to increase its direct and indirect interest in Asia Pacific Potash Corp. (APPC) (the potash concession holder) from 62.5 per cent to 90 per cent, an effective increase in project revenues of some 44 per cent.
Gerald Wright, the chief executive officer, said: "This extension represents a vote of support by our debenture holders, who remain focused on the favourable outlook for potash in Asia, the development prospects for the project and the long-term equity value of the company. By addressing the debentures pro-actively, this agreement allows us to get on with the business of finalizing the financing package and construction terms of the project."
APPC is well-advanced on the development of the two million tonnes per year Somboon Potash project, in Udon Thani province, northeast Thailand. The project permitting processes and debt financing phases are advancing, and APPC anticipates the start of construction in the first half of 2001.
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