Clarke announces proposal to amend terms of debentures due December 31, 2013

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CLARKE INC.

Jun 19, 2012, 09:28 ET

HALIFAX, June 19, 2012 /CNW/ - Clarke Inc. (the "Company") (TSX: CKI CKI.DB.A) announced today that it intends to seek the approval of the holders of its 6.00% convertible unsecured subordinated debentures due December 31, 2013 (the "Debentures") to amend the terms of the Debentures at a meeting of Debenture holders (the "Debentureholders") to be held on July 25, 2012 (the "Meeting").

The proposed amendments (the "Debenture Amendments") include:

  • ELIMINATING the ability of the Company to repay the principal amount of the Debentures through the issuance of common shares of the Company on redemption or maturity of the Debentures.
  • EXTENDING the maturity date for the Debentures from December 31, 2013 to December 31, 2018; and
  • ELIMINATING the ability of Debentureholders to convert the Debentures into common shares of the Company.

Consent Fee

The Company will pay a consent fee equal to $6 per $1000 principal amount of Debentures (the "Consent Fee") conditional upon, among other things, holders of at least 66⅔% of the principal amount of the Debentures, present or represented by proxy at the Debentureholder Meeting, voting for the Debenture Amendments. The Company will, as promptly as practicable after the satisfaction of the conditions precedent, pay the Consent Fee to Debentureholders that voted for the Debenture Amendments. Concurrently with the payment of a Consent Fee in respect of any Debentures, the Company will also, subject to certain terms and conditions, pay a soliciting dealers' fee equal to $4 per $1000 principal amount of Debentures in respect of such Debentures to soliciting dealers that are entitled to receive the fee.

Board Recommendation

The Board of Directors of the Company (the "Board") believes that the Debenture Amendments provide a number of benefits to the Company and its securityholders, including to the Debentureholders. Furthermore, the Consent Fee and extension of the maturity date offer attractive value to Debentureholders.

The Board UNANIMOUSLY RECOMMENDS that the Debentureholders vote FOR the Debenture Amendments.

About the Debenture Amendments

Further information with respect to the Debenture Amendments will be outlined in a management information circular (the "Circular") expected to be mailed to the Debentureholders in late June 2012.

For the Debenture Amendments to be approved, at least 66 2/3% of the principal amount of the Debentures voted (either in person at the Meeting or by proxy) must be FOR votes. Detailed voting instructions will be found in the Circular. The Meeting is scheduled to be held on July 25, 2012 at 10:00 a.m. (Atlantic Daylight Time) at 6009 Quinpool Road, 9th Floor, Halifax, Nova Scotia B3K 5J7.

About Clarke

Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance performance and increase return. Clarke's securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.