Breakwater Reaches Agreement with Lenders - Paves way for
2003-11-27 13:45 (New York)
release of
Funds Escrowed in October Financing
TORONTO, Nov. 27 /CNW/ - BREAKWATER RESOURCES LTD. (TSX - BWR) is very
pleased to announce that it has reached an agreement with its banking
syndicate and Dundee Bancorp Inc. ("Dundee") which satisfies the escrow
conditions of the financing completed in October.
The $30.0 million financing completed in October resulted in the issue of
85.8 million subscription receipts, at a price of $0.35 per subscription
receipt, for gross proceeds of approximately $30.0 million. The proceeds of
the financing were deposited with a trustee on behalf of the subscription
receipt holders. As a condition of the financing it was agreed that upon
satisfaction of certain escrow conditions relating to the Company's
indebtedness the proceeds would be released to Breakwater and each
subscription receipt would be exchanged for one common share of Breakwater.
The agreement reached with the banking syndicate provides that:
- Breakwater will pay down 50% of the non-revolving facility of
US$17.6 million and supplemental term facility of US$6.5 million on a
pari passu basis;
- The lenders will extend the balance of the non-revolving facility and
the supplemental term facility for a period of five years to January
2, 2009;
- Principal under the non-revolving and supplemental facilities will be
repaid in equal monthly payments beginning in July, 2004; and
- The lenders will also maintain the existing revolving facility with a
new maximum of US$25 million down from US$30 million.
The interest rate on the non-revolving facility and the supplemental term
facility will remain at LIBOR plus 2.75%. Dundee has agreed to extend its
letter of credit supporting the supplemental term facility which indebtedness
reduces to US$3.25 million.
C. K. Benner, President and CEO noted that, "The completion of this
agreement with the lenders to extend Breakwater's non-revolving facilities for
a five year period allows management to renew Breakwater's pursuit of growth
which will be accretive to shareholder value. Mr. Benner stated that, "I am
confident opportunities for growth exist both internally and externally and
that the Company has the bench strength to identify value in the marketplace."
This news release contains forward-looking statements. When used in this
news release the words "anticipate", "believe", "intend", "estimate", "plans",
"projects", "expect", "will", "budget", "could", "may", and similar
expressions are intended to identify forward-looking statements. |
