Crown Capital Announces Proposed Debenture Amendments and Default Waiver

CALGARY, AB, Aug. 29, 2024 /CNW/ - Crown Capital Partners Inc. ("Crown" or the "Corporation") (TSX: CRWN) today announced that it will seek the approval of the holders (the "Debentureholders") of its 10% unsecured subordinated debentures of the Corporation due December 31, 2024 (the "Debentures") for a resolution (the "Debentureholder Resolution") at a special meeting of the Debentureholders to be held at the offices of the Corporation, 33 Yonge Street, Suite 901, Toronto, ON, M5E 1G4, on October 18, 2024 at 10:00 a.m. (Eastern Time) (the "Meeting").

If approved by Debentureholders at the Meeting, the Debentureholder Resolution would:

1. authorize and approve certain amendments to the Corporation's amended and restated trust indenture dated June 30, 2023 between the Corporation and TSX Trust Company (the "Indenture") to: (i) extend the maturity date of the Debentures from December 31, 2024 to December 31, 2026; (ii) amend the interest rate on the Debentures from 10% to 11% effective a minimum of five trading days following the approval of the Debentureholder Resolution and from 11% to 12% effective as of December 31, 2025; and (iii) amend the interest payment dates from occurring semi-annually on June 30 and December 31 of each year to occurring annually on December 31 of each year, with the next payment to occur effective December 31, 2025 for the interest accrued on the Debentures from June 30, 2024 up to, but excluding, December 31, 2025; and
2. waive the default by the Corporation under the Indenture for the failure to make the interest payment on the Debentures (the "Deferred Interest Payment") due on June 30, 2024 (the "Default Waiver"), subject to the requirement that the Corporation make the Deferred Interest Payment to Debentureholders within 60 days of the approval of Debentureholder Resolution (the "Deferred Interest Payment Deadline"). The Deferred Interest Payment will be made to Debentureholders holding Debentures as of a record date to be set by the Corporation following the Meeting. In the event that the Deferred Interest Payment is not made by the Deferred Interest Payment Deadline, the Default Waiver will be of no further force or effect.

The board of directors of the Corporation believe that the Debenture Amendments and Default Waiver provide the following advantages:

1. Payment of Deferred Interest Payment:  The Corporation believes that the extension of the maturity date will allow it to be in a better position to pay the Deferred Interest Payment to the Debentureholders by the Deferred Interest Payment Deadline.
2. Extension of Maturity Date: The extension of the maturity date will afford Debentureholders a longer period of time during which to receive interest at a favourable rate and will provide the Corporation with additional time to fund the repayment of the Debentures from the proceeds of asset sales or otherwise.
3. Increased Interest Rate: Increasing the interest rate from 10% to 11% effective a minimum of five trading days following the approval of the Debentureholder Resolution and from 11% to 12% effective December 31, 2025 provides a more attractive yield to Debentureholders.
4. Consent Fee: Any Debentureholder that votes for the Debenture Amendments will receive a cash consent fee (the "Consent Fee") of $10 per $1,000 principal amount of Debentures held by that Debentureholder as of September 5, 2024 (the "Record Date") provided that certain other conditions required for the payment of the Consent Fee are satisfied, including the Debenture Amendments are validly approved by Debentureholders and the Toronto Stock Exchange (the "TSX").

Prior to the Deferred Interest Payment Deadline, provided that the Debentureholder Resolution is approved, the Corporation intends to undertake a private placement financing in order to obtain the funds to make the Deferred Interest Payment. There can be no assurance that such private placement financing will be completed by the Corporation prior to the Deferred Interest Payment Deadline.

The effective date of the Debenture Amendments will be a minimum of five trading days following the approval of the Debentureholder Resolution. Further particulars of the expected benefits of the Debenture Amendments and Default Waiver will be described in the management information circular of the Corporation relating to the Meeting (the "Circular"), which will be available under the Corporation's profile on SEDAR+ at www.sedarplus.ca and which will be mailed to Debentureholders in the coming weeks.

The Debentureholder Resolution will only be effective if passed by an extraordinary resolution of the holders of at least 66 ⅔% of the principal amount of the Debentures present in person or by proxy at the Meeting and entitled to vote in respect of the Debentureholder Resolution.

Debentureholders may vote on or before 10:00 a.m. (Eastern Time) on October 16, 2024 by following the voting instructions set out in the Circular. Only Debentureholders of record at the close of business on the Record Date will be entitled to vote at the Meeting.

About Crown Capital Partners (TSX:CRWN)

Founded in 2000 within Crown Life Insurance Company, Crown Capital Partners is a capital partner to entrepreneurs and growth businesses mainly operating in the telecommunications infrastructure, distribution services, and distributed power markets. We focus on growth industries that require a specialized capital partner, and we aim to create long-term value by acting as both a direct investor in operating businesses serving these markets and as a manager of investment funds for institutional partners. For additional information, please visit crowncapital.ca.

FORWARD-LOOKING STATEMENTS

This news release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the Debenture Amendments, the Default Waiver, the anticipated payment of the Deferred Interest Payment, the consequences of the Debentureholder Resolution not being approved by Debentureholders, the timing and value of potential asset sales, and management's intended uses of the proceeds of asset sales. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown's periodic filings with Canadian securities regulators. See Crown's most recent annual information form for a detailed discussion of the risk factors affecting Crown. In addition, Crown's dividend policy will be reviewed from time to time in the context of the Corporation's earnings, financial requirements for its operations, and other relevant factors and the declaration of a dividend will always be at the discretion of the board of directors of the Corporation. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

SOURCE Crown Capital Partners Inc.

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