TORONTO, Jan. 16, 2013 /CNW/ - Aterra Investments Limited ("Aterra") announces it acquired on January 15, 2013, in a private placement, $1,000,000 aggregate principal amount of secured convertible debentures ("Debentures") of Plains Creek Phosphate Corporation ("Plains Creek") due March 31, 2014. The Debentures bear interest at 10% per annum. Every $1,000 principal amount of Debentures is convertible at any time, at Aterra's option: (a) initially, into 10,000 common shares of Plains Creek ("Common Shares") at a price of $0.10 per share; and (b) in the event of a share consolidation by Plains Creek, at a conversion price per share equal to the greater of (i) $0.01 per share times the consolidation ratio, and (ii) the minimum allowable conversion price of $0.10 per share under the policies of the TSX Venture Exchange. In connection with the issuance of the Debentures, Plains Creek agreed to use its best efforts to cause a Common Share consolidation to become effective on a 20-to-1 basis on or prior to March 15, 2013 (the "Proposed Consolidation"). At the time of Debenture conversion, any and all accrued interest is also convertible at Aterra's option into Common Shares at the applicable conversion price.
Aterra also owns 28,125,000 Common Shares (the "Owned Shares") and warrants to purchase an additional 14,062,500 Common Shares (the "Warrant Shares"). Assuming Aterra were to fully convert its $1,000,000 aggregate principal amount of Debentures (but none of the interest) and exercise all its warrants, then (a) if such conversion and exercise were to occur before the Proposed Consolidation became effective, Aterra would acquire 10,000,000 Common Shares upon conversion of the Debentures, representing approximately 2.4% of the then outstanding Common Shares, and the Common Shares acquired upon such conversion, together with the Owned Shares and the Warrant Shares, would represent approximately 12.7% of the then outstanding Common Shares, and (b) if such conversion and exercise were to occur after the Proposed Consolidation became effective, Aterra would acquire 5,000,000 post-consolidation Common Shares upon conversion of the Debentures, representing approximately 19.9% of the then outstanding post-consolidation Common Shares, and the post-consolidation Common Shares acquired upon such conversion, together with the Owned Shares and the Warrant Shares, would represent approximately 28.3% of the then outstanding post-consolidation Common Shares.
Aterra acquired the Debentures for investment purposes and continues to monitor the business, prospects, financial condition and potential capital requirements of Plains Creek. Depending on its evaluation of these and other factors, Aterra may from time to time in the future increase or decrease its ownership, control or direction over the Common Shares or other securities of Plains Creek through market transactions, private agreements, subscriptions from treasury or otherwise.
SOURCE Aterra Investments Limited