HALIFAX,
July 17, 2012 /CNW/ - Clarke Inc.
("Clarke") (TSX: CKI CKI.DB.A), in response to investor inquiries,
is providing additional information and clarification regarding the
proposed amendments to its 6.0% convertible debentures of which
there is $63 million outstanding and
mature on December 31, 2013 (the
"Current Debentures") which was announced by press release on
June 19, 2012.
As a matter of good corporate governance, Clarke
continuously evaluates and seeks to optimise the company's capital
structure. Clarke's objective in this regard is to ensure
that Clarke maintains its flexibility to pursue its investment
strategy and to continue to build value for all its various
securityholders. The proposed amendment to the Current
Debentures achieves these objectives and Clarke is providing
clarification in response to some investor inquiries.
Clarke currently has committed credit facilities
and marketable securities in excess of $125
million. Clarke is permitted to draw down on its
credit facilities and use the proceeds of such facilities for
general corporate purposes, including to redeem the Current
Debentures. The interest rates on such facilities are substantially
lower than the interest rate on the Current Debentures.
George Armoyan,
CEO of Clarke, stated: "Some of our debentureholders have inquired
as to why Clarke is pursuing these amendments." Mr. Armoyan added:
"While Clarke is currently able to borrow funds at a substantially
lower cost than under its existing debentures, these debentures do
give the company increased flexibility to execute on its investment
strategy. Rather than using available credit facilities or raising
new capital to redeem our existing debentures, we wanted to reach
out to our existing debentureholders and invite them to remain a
financing partner of Clarke for another five years at an attractive
interest rate. We also decided to offer a consent fee to those
debentures that vote in favour of the debenture amendments and
continue to support Clarke in its business initiatives."
The advantages of the proposed amendments
include the following:
- Clarke believes that the 6.0% interest rate on the Current
Debentures represents an attractive yield, especially in the
current low interest rate environment and in light of other
reinvestment opportunities available.
- Clarke has committed credit facilities and marketable
securities in excess of $125
million. Clarke is permitted to draw down on its
facilities and use the proceeds to redeem the Current Debentures.
Doing so would result in the holders of the Current Debentures
losing an attractive and recurring source of income.
- Holders of the Current Debentures that vote in favour of the
proposed amendments will receive a consent fee of 60 basis points
or $6 per $1,000 principal amount of Current Debentures.
Financial advisors of debentureholders that vote in favour of the
proposed amendments will receive a consent fee of 40 basis points
or $4 per $1,000 principal amount of Current
Debentures.
Accordingly, Clarke encourages holders of the
Current Debentures to vote in favour of the proposed
amendments. Holders of the Current Debentures can vote in
favour of the proposed amendments by internet or by telephone or by
contacting their brokers or investment advisors on or before
July 23, 2012.
Further information with respect to the proposed
amendments is outlined in a management information circular which
has been mailed to the holders of the Current Debentures and is
available under Clarke's profile on SEDAR at www.sedar.com or
www.clarkeinc.com.
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.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to
certain forward-looking statements relating, but not limited to,
Clarke's expectations, intentions, plans and beliefs with respect
to Clarke. Often, but not always, forward-looking statements can be
identified by the use of words such as "plans", "expects", "is
expected", "budget", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
equivalents or variations, including negative variations, of such
words and phrases, or state that certain actions, events or
results, "may", "could", "would", "should", "might" or "will" be
taken, occur or be achieved. Forward-looking statements include,
without limitation, statements relating to Clarke's beliefs
regarding the benefits of the proposed amendments to the Current
Debentures, Clarke's ability to redeem all or part of the Current
Debentures and the effects of any such redemption on the holders of
the Current Debentures, and the potential uses of Clarke's credit
facility. Forward-looking statements rely on certain underlying
assumptions that, if not realized, can result in such
forward-looking statements not being achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that could cause the actual results to be materially
different from the results expressed or implied by such
forward-looking statements and there can be no assurance that such
statements will prove to be accurate. Other than as required by
applicable Canadian securities laws, Clarke does not intend to
update or revise any such forward-looking statements to reflect
events or circumstances after the date of this document or to
reflect the occurrence of unanticipated events. Accordingly,
readers should not place undue reliance on forward-looking
statements.
SOURCE CLARKE INC.