Belkin Enterprises Ltd.

September 02, 2011 14:52 ET

Belkin Enterprises Ltd.: News Release

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 2, 2011) - Belkin Enterprises Ltd. ("Belkin") announces that, pursuant to section 1.1(4) of National Instrument 55-104 – Insider Reporting Requirements, Belkin has been deemed to have beneficial ownership of the common shares ("Sterling Shares") in the capital of Sterling Shoes Inc. ("Sterling Shoes") that could be issued to BII Acquisition Inc. ("BIIAI") upon the redemption of the $2,573,000 principal amount of convertible unsecured subordinated debentures (the "Debentures") of Sterling Shoes held by BIIAI.

From March 2010 to date, Belkin, through its wholly-owned subsidiary BII Acquisition Inc. ("BIIAI"), acquired $2,573,000 principal amount of convertible unsecured subordinated debentures (the "Debentures") of Sterling Shoes Income Fund (the "Fund") and Sterling Shoes Inc. ("Sterling Shoes").

By way of a Plan of Arrangement effective July 1, 2010, the unit holders of the Fund became shareholders of Sterling Shoes and Sterling Shoes assumed all of the Fund's obligations for the Debentures.

The Debentures mature on October 31, 2012 (the "Maturity Date"). The Debentures are convertible at the option of the holder, at a ratio of 47.281 common shares in the capital of Sterling Shoes ("Sterling Shares") per $1,000 principal amount. The Debentures were not redeemable on or before October 31, 2010. Between October 31, 2010 and October 31, 2011, the Debentures were redeemable, in whole or in part, at the option of Sterling Shoes, provided that the market price of the Sterling Shares on the date the redemption notice was given was not less than 125% of $21.15. During this time period, the market price was less than 125% of $21.15.

After October 31, 2011 and before the Maturity Date, the Debentures are redeemable, in whole or in part, at the option of Sterling Shoes, at a price equal to the principal amount of the Debentures being redeemed, plus accrued and unpaid interest. The principal amount of any redeemed Debentures may be repaid in cash or by issuing freely tradable Sterling Shares. The number of Sterling Shares to be issued will be determined by dividing the aggregate redemption price of the outstanding Debentures to be redeemed by 95% of the Market Price (defined below).

The volume weighted average trading price for the 20 consecutive dates ending on the fifth trading day preceding September 2, 2011 (the "Market Price") of the Sterling Shares was approximately $0.67. Accordingly, if the redemption date was September 2, 2011, the issue price used to determine the number of Sterling Shares to be issued for the redemption of the Debentures would be $0.63 and if Sterling Shoes elected to redeem all of the Debentures held by BIIAI, 4,084,127 Sterling Shares (or 38% of the then deemed issued and outstanding Sterling Shares) would be issued to BIIAI.

Neither Belkin, nor any of its affiliates is currently a party to any agreement in respect of the acquisition, holding, disposition or voting of any securities of Sterling Shoes.

A copy of the early warning report relating to this transaction is available at www.sedar.com.

Contact Information

  • Belkin Enterprises Ltd.
    Michael Heskin
    Senior Vice President, Finance
    (604) 688-8533
    (604) 688-3569 (FAX)