CANADIAN SATELLITE RADIO HOLDINGS INC. COMPLETES C$20 MILLION CONVERTIBLE DEBT OFFERING CSR Release Canadian Satellite Radio Holdings Inc., operator of XM Canada, today announced it has closed a private placement of C$20 million aggregate principal amount of convertible unsecured subordinated debentures due September 12, 2014 (the "Debentures").
"We are very pleased to announce this financing, especially during these challenging credit market conditions," said John Bitove, chairman and chief executive officer of CSR. “Our growth exceeded expectations this quarter and as we continue to focus on new development initiatives, we will use the proceeds to search for innovative opportunities to aggressively grow the business and further increase our subscriber base.”
The Debentures will bear interest at a rate of 8.0 per cent per annum payable semi-annually in arrears on December 31 and June 30, with the initial interest payment due on December 31, 2007. Each debenture holder shall have the option to receive such interest either in the form of cash or Class A Subordinated Voting Shares of CSR (“the Shares”). At any time prior to September 12, 2014, the Debentures will be convertible at a conversion price of $5.92 at the holders' option into Shares of CSR which is equal to a conversion ratio of 168.919 Shares per $1,000 principal amount of Debentures, subject to adjustment in certain circumstances.
A group of investors including XM Satellite Radio Holdings Inc., CSR’s chairman and chief executive officer, John Bitove, and related associates thereof, directly or indirectly acquired, in the aggregate, C$10 million of the Debentures.
“This is a prudent move that provides an additional source of funding to achieve even greater growth targets,” said Bitove. “I continue to be extremely confident in our business plan.”
The private placement of the Debentures was completed through a syndicate of agents led by GMP Securities L.P. and including Genuity Capital Markets. The independent directors of CSR reviewed and approved the terms of the offering unanimously. Further details of matters with respect to the Debentures are set out in the trust indenture and agency agreement for the offering, which will be available under the Company’s profile at www.sedar.com.
This news release does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. |