CST: 29/07/2016 18:40:45   

Tuckamore Capital Management Inc. Provides Update on February 19, 2016 Meeting Matters and Waiver of Proxy Cut-Off

163 Days ago

TORONTO, ONTARIO--(Marketwired - Feb 16, 2016) - Tuckamore Capital Management Inc. (TSX:TX)(TSX:TX.DB.B) ("Tuckamore" or the "Company") provided an update today on its proposed refinancing transactions. As previously announced, the Company entered into a purchase agreement (the "Purchase Agreement") and a backstop commitment letter (the "Backstop Commitment Letter") with Canso Investment Counsel Ltd. (in its capacity as portfolio manager for and on behalf of certain accounts that it manages, "Canso") on January 26, 2016 whereby Canso has agreed to purchase up to: (i) $176,228,000 principal amount of 8.00% senior secured debentures due 2026 of the Company (the "Senior Secured Debenture Private Placement"); and (ii) up to $35,000,000 principal amount of 10.00% second lien secured convertible debentures due 2026 of the Company ("Convertible Secured Debentures"). A minimum of $25,000,000 in Convertible Secured Debentures will be purchased by Canso by way of private placement (the "Convertible Secured Debenture Private Placement"). The Company expects to offer up to $10,000,000 aggregate principal amount of Convertible Secured Debentures (the "Offered Debentures") to holders of its common shares pursuant to an offering (the "Rights Offering" and together with the Senior Secured Debenture Private Placement and the Convertible Secured Debenture Private Placement, the "Refinancing Transactions") of transferable rights, provided that Canso has committed pursuant to the Backstop Commitment Letter to purchase any Convertible Secured Debentures not otherwise purchased by shareholders pursuant to the Rights Offering. The Company is continuing to address the comments of the Ontario Securities Commission (the "OSC") in respect of its preliminary prospectus filed February 1, 2016 in respect of the Rights Offering (the "Preliminary Prospectus").

The Company will be seeking shareholder approval of the Refinancing Transactions at a special meeting of its shareholders to be held on February 19, 2016 (the "Meeting") and has mailed its management information circular and form of proxy (together, the "Meeting Materials") to shareholders, which set out details of the Refinancing Transactions and the shareholder approvals required pursuant to applicable securities laws and the policies of the Toronto Stock Exchange (the "TSX"). Shareholders of record as of the close of business on January 12, 2016 ("Shareholders") are entitled to notice of, and to vote at, the Meeting and are encouraged to read the Meeting Materials in their entirety. The Meeting Materials are available on the Company's SEDAR profile at www.sedar.com. The Company is announcing that a determination has been made to waive the proxy cut-off time of 10:00 a.m. (Toronto time) on Wednesday, February 17, 2016. Accordingly, proxies will be accepted until immediately prior to the commencement of the Meeting on Friday, February 19, 2016 or any adjournment(s) or postponement(s) thereof.

Waiver Application

It is anticipated that the Convertible Secured Debentures to be issued pursuant to the Convertible Secured Debenture Private Placement will be issued at a subscription price of $100 per $100 principal amount of Convertible Secured Debentures (the "Private Placement Subscription Price"). As a result of certain recent amendments to applicable securities laws governing rights offerings, if there is no published market for the security to be issued upon the exercise of a right, (i) the subscription price for the security must be lower than the fair value of the security on the date of the final prospectus unless the issuer restricts all of its insiders from increasing their proportionate interest in the issuer through the exercise of the rights distributed under the prospectus or through a stand-by commitment; and (ii) evidence of fair value of such underlying security must be delivered to the regulators. As disclosed in the Circular, Canso, in its capacity as portfolio manager for and on behalf of certain accounts that it manages, controls or directs an aggregate of approximately 17,680,650 common shares of the Company which represents approximately 16.1% of the outstanding common shares of the Company on an undiluted basis. Accordingly, Canso is an "insider" of the Company pursuant to applicable securities laws and may increase its proportionate interest in Tuckamore through its participation in the Rights Offering and its obligations pursuant to the Backstop Commitment Letter. Accordingly, the recent amendments to the rights offering regime would require the Company to issue the Offered Debentures at a price that is lower than their fair value.

Canso will not receive a discount on the issue price of the Convertible Secured Debenture under the Convertible Secured Debenture Private Placement, nor will Canso receive any standby commitment fee for the Offered Debentures issued pursuant to the Rights Offering.

Additionally, in accordance with National Instrument 45-102 Resale of Securities, the Convertible Secured Debentures issued to Canso pursuant to the Convertible Secured Debenture Private Placement will be subject to a four-month hold period (while the Offered Debentures will be without such resale restriction upon issuance).

The Rights Offering, which provides an opportunity for Shareholders in eligible jurisdictions to purchase Convertible Secured Debentures by way of prospectus, was included in the Refinancing Transactions at the request of the Company to allow all Shareholders the opportunity to participate in the Refinancing Transactions.

Accordingly, concurrent with the filing of its Preliminary Prospectus, the Company submitted an application (the "Waiver Application") to the OSC, the principal regulator of the Company, requesting exemptive relief from the pricing requirements noted above in order to permit the Company to offer the Offered Debentures at a subscription price equal to the Private Placement Subscription Price and requesting relief from the requirement to deliver evidence of fair value of the Offered Debentures to the OSC.

If granted by the OSC, the requested relief will be evidenced by the issuance of a receipt by the OSC for the final prospectus in respect of the Rights Offering. The Company will provide a further update on the timing of the launch of the Rights Offering and other key dates in due course.

Removal of Employment Agreement Amendment of the Executive Chairman

The Company will no longer be proceeding with the MacDonald Employment Agreement Amendment described in the Meeting Materials.

In connection with the Refinancing Transactions, and as more fully set out in the Meeting Materials, Mr. MacDonald had previously agreed to amend the terms of his employment agreement with the Company in order to eliminate his entitlement to certain severance payments in the event that he resigned or was terminated in certain circumstances following a change of control of the Company in exchange for the issuance by the Company of $1,000,000 aggregate principal amount of Convertible Secured Debentures.

Based on feedback received from Shareholders, and after discussions between the Company and Mr. MacDonald and between the Company and Canso (as the MacDonald Employment Agreement Amendment impacts the terms of the Convertible Secured Debentures), Mr. MacDonald has agreed to waive any change of control trigger that may have resulted from the Refinancing Transactions and to cap any future severance entitlement under his existing employment agreement to $1,500,000. Accordingly, the Company has determined to withdraw the resolution related to the MacDonald Employment Agreement Amendment from consideration by Shareholders at the Meeting.

The withdrawal of this resolution from the matters of business to be considered at the Meeting will not affect the validity of the form of proxy enclosed with the Meeting Materials, nor the validity of any proxy that has been otherwise already properly submitted. Shareholders wishing to complete and submit a proxy in relation to the Meeting do not need to indicate their voting instructions on the resolution regarding the MacDonald Employment Agreement Amendment. At the Meeting, the only resolution that will be submitted for the consideration of Shareholders will be the resolution set forth in the Meeting Materials with respect to the approval of the Refinancing Transactions.

Voting at the Meeting and Waiver of Proxy Cut-off

At the Meeting, Shareholders are entitled to one vote for each common share of the Company held in respect of the resolution approving the Refinancing Transactions, as more fully set forth in the Meeting Materials.

Your vote is important regardless of the number of common shares of the Company that you own. Shareholders who are unable to attend the Meeting in person are requested to complete their form of proxy for use at the Meeting or any adjournment or postponement thereof.

To be effective, your form of proxy must be submitted to CST Trust Company using one of the following methods:

delivery by fax to (416) 368-2502, or toll free (in Canada and the U.S. only) to 1-866-781-3111;
delivery by mail to P.O. Box 721, Agincourt, Ontario, M1S 0A1;
delivery by email of a scanned copy of the form of proxy to proxy@canstockta.com; or
delivery in person at 320 Bay Street, Basement Level, Toronto, Ontario, M5H 4A6.

The proxy cut-off time for the Meeting of 10:00 a.m. (Toronto time) on Wednesday, February 17, 2016 has been waived, and the Company will therefore accept proxies until immediately prior to the commencement of the Meeting on Friday, February 19, 2016 or any adjournment(s) or postponement(s) thereof.

Shareholders who have already voted and wish to revoke their proxies may do so by depositing an instrument in writing, executed by the Shareholder or by his or her attorney authorized in writing, with CST Trust Company using one of the methods listed above by no later than than 5:00 p.m. (Toronto time) on February 18, 2016, or not later than 5:00 p.m. (Toronto time) on the business day immediately preceding any adjourned or postponed meeting, or with the Chair of the Meeting on the day of, but prior to the commencement of, the Meeting or any adjournment(s) or postponement(s) thereof, or in any other manner permitted by law.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Tuckamore

Tuckamore (http://tuckamore.ca) has investments in four businesses representing a diverse cross-section of the Canadian economy.

Forward-looking information

This press release contains forward-looking information based on current expectations, including but not limited to Tuckamore's expectations in connection with the Refinancing Transactions, the Waiver Application and the Meeting. Forward-looking information is often, but not always, identified by the use of the words "contemplate", "expect" and "anticipate" and statements that an event or result "may", "will", "should", "could" or "might" occur and any similar expressions or negative variations thereof. In providing forward-looking information in this press release, management of the Company has made numerous assumptions regarding the Refinancing Transactions which it believes to be reasonable, including assumptions relating to: (i) the Company's existing and future business prospects and opportunities, including that the Company will secure further extensions to the maturity of its indebtedness under its existing senior secured credit facilities; (ii) the receipt of shareholder, regulatory and stock exchange approval in respect of the Refinancing Transactions; (iii) the satisfaction or waiver of all other conditions to the completion of the Refinancing Transactions; (iv) the expected actions of third parties; and (v) the outcome of the Refinancing Transactions and related transactions and agreements including the expected use of proceeds. Forward-looking information entails various risks and uncertainties however that could cause actual results to differ materially from those reflected in the forward-looking information. Specific risks that could cause actual results to differ materially from those anticipated or disclosed herein include, but are not limited to: (i) failure to satisfy the conditions to complete the Refinancing Transactions including failure to receive required regulatory approval, stock exchange, shareholder, third party approvals and/or consents including, without limitation, with respect to the Waiver Application; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Purchase Agreement and Backstop Commitment Letter; (iii) the Company's inability for any reason to obtain further extensions to the maturity of its existing indebtedness under its senior secured credit facilities prior to the consummation of the Refinancing Transactions; (iv) the delay of consummation of the Refinancing Transactions or the failure of the Refinancing Transactions to be completed for any other reason; (v) the amount of costs, fees and other expenses incurred in connection with the Refinancing Transactions; (vi) the anticipated timing of the Meeting; and (vi) the risk that the anticipated effects of the Refinancing Transactions, if completed, may not result in the outcomes expected by management.

In addition, general risks relating to capital markets, economic conditions, regulatory changes, changes in interest rates as well as the management and operations of the Company's business may also cause actual results to differ materially from those anticipated or disclosed herein. These and other risks and uncertainties relating generally to Tuckamore's business and the Refinancing Transactions in particular are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada and available at www.sedar.com and the Meeting Materials. Forward-looking information are not guarantees of future performance, and management's assumptions upon which such forward-looking information are based may prove to be incorrect. Accordingly, there can be no assurance that actual events or results will be consistent with the forward-looking information disclosed herein. In light of the significant uncertainties inherent in forward-looking information, any such forward-looking information should not be regarded as representations by Tuckamore that its objectives or plans relating to the Refinancing Transactions or otherwise will be achieved. Investors are cautioned not to place undue reliance on any forward-looking information contained herein and that such forward-looking information are provided solely for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. In addition, forward-looking information relates to the date on which they are made. Tuckamore disclaims any intention or obligation to update or revise any forward-looking information contained herein, whether as a result of new information, future events or otherwise, except to the extent required by law.

Tuckamore Capital Management Inc.
Keith Halbert
Chief Financial Officer
416-775-3796
keith@tuckamore.ca
www.tuckamore.ca