SPOKANE, WA, Sept. 18, 2012 /CNW/ - Gold Reserve Inc. (TSX
VENTURE:GRZ) (NYSE-MKT:GRZ) (the "Company") announced today that it
is notifying holders ("Holders" or "Noteholders") of its 5.50%
Senior Subordinated Convertible Notes due 2022 (the "Notes") of its
offer ("Offer") to the Holders of an opportunity to participate in
a restructuring transaction that has been agreed to with its four
largest Noteholders.
On September 18, 2012 the Company
announced that it had agreed with Holders of 98.7% of the
outstanding Notes ("Large Noteholders") to restructure their Notes,
subject to such consents as may be required under the Indenture,
that will allow the Company to restructure the Notes with a
combination of cash, common shares, modified terms for the
remaining balance of the Notes and a Contingent Value Right as
described further below. The Company is now offering the terms of
that restructuring arrangement to all remaining Noteholders such
that the Holders of the remaining 1.3% of the Notes (representing
$1,080,000 in aggregate principal
amount) now can elect to accept the same arrangement as was agreed
by the Company with the Large Noteholders.
The Company has filed its Tender Offer Statement with respect to
the offer ("Offer"). Each Holder will have the option to tender
their Notes for the following consideration for each $1,000 in principal amount of Notes: (i)
$200 in cash, (ii) 147.06 common
shares, (iii) $300 of amended notes
which will remain outstanding under the indenture governing the
Notes, as amended, (iv) a Contingent Value Right ("CVR") entitling
the holder to a percentage of an award or settlement of the
Company's ICSID arbitration claim against the Government of
Venezuela with respect to the
expropriation of the Company's Brisas Project and any proceeds from
the sale of its mining data, and (v) additional cash consideration
payable based on each Holder's pro rata percentage of Notes
restructured pursuant to the Offer in an aggregate amount of up to
$1 million (collectively, the "Offer
Consideration"). The maximum CVR net of taxes and other deductions
that will be paid if all Holders elect to participate in the Offer
will not exceed 5.535% of an award or settlement and sale of the
mining data. The Restructuring was approved by the Company's
shareholders at its annual and special meeting held on June 27, 2012.
In order to surrender the Notes and participate in the Offer,
Holders must deliver a letter of transmittal no later than
5:00 p.m., New York City time, on October 16, 2012 pursuant to the instructions in
the Offer.
Pursuant to the Indenture, the Notes are currently convertible
into 132.626 shares of the Company's common stock per $1,000 principal amount of Notes, subject to
adjustment under certain circumstances.
The Company will make available to Holders, through The
Depository Trust Company, documents specifying the terms,
conditions and procedures for surrendering and withdrawing Notes.
Holders are encouraged to read these documents carefully before
making any decision with respect to the surrender of the Notes,
because these documents contain important information regarding the
details of the Company's obligation to repurchase the Notes.
Doug Belanger, President stated,
"This Tender Offer will complete our commitment to offer to all
remaining noteholders, the opportunity to participate in the same
note restructuring transaction that was agreed to with the three
largest noteholders. It is the Company's intention to redeem for
cash any notes outstanding after the completion of this Tender
Offer."
Holders of Notes are urged to read the Offer, letters of
transmittal and related offer materials when they become available
because they contain important information. Our Tender Offer
Statement, which includes the offer materials, is being filed with
the Securities and Exchange Commission ("SEC") today. The Offer,
letters of transmittal and related documents may be obtained free
of charge at the SEC's website, www.sec.gov or by directing a
request to the Company.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
Further information regarding the Company can be located at
www.goldreserveinc.com, www.sec.gov and www.sedar.com.
"Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release."
SOURCE Gold Reserve Inc.