The Notes have a maturity of five years and bear an 8.75% annual coupon payable half-yearly. The principal amount of the Notes may be converted into common shares of Grove at a price of C$1.00 per common share:
(a) at the holder's election; and (b) at Grove's election, if the weighted average price of common shares on the TSX Venture Exchange ("TSX-V") is C$1.70 or greater for a period of 25 consecutive days.Interest may be paid in common shares or cash during the first year of the term of the Notes at Grove's election and in subsequent years at the holder's election. Common shares issued, if any, in respect of interest will be issued for an amount that equates to a 10% discount to the 30-day weighted average price of common shares on the TSX-V preceding the coupon payment date. The Notes are subordinate to permitted encumbrances including, among others, any banking facilities or other debt entered into to develop Grove's properties and are secured by a general charge over Grove's assets.
The Notes and the underlying common shares are subject to four month hold periods, pursuant to Canadian securities laws, expiring on 14 September 2006.
Glenn Whiddon, CEO, commented that: "We welcome RAB's continued support and its creative input. Both Mirabaud and Westwind provided valuable assistance with this transaction. The net proceeds of the financing will be used to advance our exploration and development programs."
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