Postmedia Announces Receipt of Shareholder Approval to Extend the Maturity of its Outstanding Notes Through Consents

TORONTO–(BUSINESS WIRE)–Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today announced that, following its announcement on February 17, 2022, it has obtained the consent of Beneficial Shareholders (excluding Canso and Chatham, each as defined herein below) of the Company (“Shareholders”) holding, in aggregate, shares representing more than 50% of the voting rights attached to the issued and outstanding Class C Voting Shares of the Company (the ” Voting”) and Class NC Variable Voting Shares (the “Variable Voting Shares” and, together with the Voting Shares, the “Shares”), approving the extension of the maturity of the Notes senior notes, junior notes and revolving credit facility based on assets of the Company, as well as the issuance of 794,630 of the variable voting shares of Postmedia to the holders of the senior notes in the framework of the extension of these banknotes.

As previously announced, the Company has entered into definitive agreements, subject to customary closing conditions, providing for an extension of the maturity of its 8.25% Senior Secured Notes due 2023 (the “Senior Notes”) ) and its 10.25% Senior Secured Bond Notes due 2024 (the “Second Lien Bonds” and, together with the First Lien Bonds, the “Bonds”) approximately three and a half years from July 15 2023 to approximately February 17, 2027, in the case of the First Lien Obligations, and from January 15, 2024 to August 17, 2027, in the case of the Second Lien Obligations, on substantially similar terms (including interest rates) as existing terms of the First Lien Obligations and the Second Lien Obligations, respectively. The Company has also entered into a definitive agreement providing for the extension of the maturity of its asset-based revolving credit facility (the “ABL Facility”) by three years to October 1, 2025. As part of the extension Upon maturity of the Senior Notes, the Company has agreed to issue approximately 794,630 Variable Voting Shares (the “Executive Shares”) to holders of the Senior Notes at an implied price of 2 $.10 as a fee for the extension.

TSX Approval Requirement

There are currently CA$63,472,444 in aggregate principal amount of senior notes outstanding, all of which are held by Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts it manages (collectively, “Canso”). There are currently US$158,667,005 in aggregate principal amount of Second Lien Notes outstanding, a substantial portion of which is held by Chatham and its affiliates (collectively, “Chatham”). There is currently no amount drawn on the ABL facility.

By virtue of their respective interests in the Company, Canso and Chatham are each an “insider” of the Company under the terms of the TSX Company Handbook. Under section 501(c) of the TSX Company Handbook, certain transactions involving insiders of a non-exempt issuer require disinterested shareholder approval if the value of the consideration the insider exceeds 10% of the market capitalization of the issuer. The value of the interest to be received by Chatham under the extended term of the Second Lien Notes and the ABL Facility exceeds 10% of the company’s market capitalization and as such shareholder approval is required . Although the value that Canso will receive from the maturity extension of the senior notes (including participation fee shares) will not exceed 10% of the company’s market capitalization, the company has elected to seek shareholder approval for these transactions as well as approval for the extension of the maturity of the Second Lien Notes and the ABL Facility.

The Company has obtained the above approvals by seeking written consents pursuant to Section 604(d) of the TSX Company Handbook from Beneficial Shareholders (excluding Canso and Chatham and their affiliates and associates) holding, in aggregate, shares representing more than 50% of the voting rights attached to the issued and outstanding shares of the Company. The transactions will not have a material impact on the control of the Company.

The Company intends to provide a further update on the closing of the extensions to the maturities of the First Lien Notes, the Second Lien Notes and the ABL Facility.

About Postmedia Network Canada Corp.

Postmedia Network Canada Corp. (TSX: PNC.A, PNC.B) is the proprietary holding company of Postmedia Network Inc., a Canadian news media company representing more than 130 brands across multiple print, online and mobile platforms. Award-winning journalists and innovative product development teams bring engaging content to millions of people every week, when and where they want it. This exceptional content, reach, and reach provides advertisers and marketers with compelling solutions to effectively reach target audiences. For more information, visit www.postmedia.com.

Forward-looking information

This press release contains certain information that is “forward-looking information” concerning anticipated future events, results, circumstances, performance or expectations regarding the Company and its operations. Forward-looking information includes statements that are predictive in nature, depend on future events, trends, outlook or conditions, or include words such as “believe”, “expect”, “intend to “, “estimate”, “anticipate”, “may”, “will”, “could”, “will”, “should” and similar expressions and their derivatives. The forward-looking statements contained in this press release include, but do not limited to, statements regarding the extension of the maturity dates of the Senior Notes, the Junior Notes and the ABL Facility. These forward-looking statements are based on a number of assumptions which may prove to be incorrect. , including, but not limited to: the satisfaction or waiver of all closing conditions and the completion of the extension of the maturity dates of the Senior Notes, the Second Lien Notes and the ABL Facility. prospect ives are based on underlying assumptions and the beliefs, estimates and opinions of management, and are subject to inherent risks and uncertainties (many of which are beyond Postmedia’s control) surrounding future expectations generally, which may cause actual results to vary from plans, objectives and estimates. These risks and uncertainties include, among others: the possibility that the proposed extension of the Notes and the ABL Facility will not be completed, as well as the various risk factors described in the section entitled “Risk Factors” contained in our annual MD&A for the fiscal years ended August 31, 2021 and 2020. Although the Company bases this information and statements on assumptions deemed reasonable when made, they do not constitute guarantees of future performance and actual operating results, condition financial and liquidity conditions, and developments in the industry in which the Company operates, may differ materially from such information and statements contained in this press release. Given these risks and uncertainties, you should not place undue reliance on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statement. Except as required by law, the Company does not undertake, and specifically disclaims, any obligation to update such information or statements or to publicly announce the results of any revisions to such information or statements.

Comments are closed.