Melcor Developments Ltd.
TSX : MRD

February 08, 2011 17:49 ET

Melcor Developments Ltd. Announces Completion of $40,000,000 Private Placement of 6.25% Convertible Unsecured Subordinated Debentures

EDMONTON, ALBERTA--(Marketwire - Feb. 8, 2011) - Melcor Developments Ltd. ("Melcor" or the "Company") (TSX:MRD) is pleased to announce the successful closing of the issue and sale of $40,000,000 aggregate principal amount of 6.25% convertible unsecured subordinated debentures ("Debentures"). The Debentures were issued to a group of arm's length and non-arm's length accredited investors by way of private placement (the "Private Placement"), and, as previously announced on January 21, 2011, the Company intends to use the net proceeds from the Private Placement for general corporate purposes.

The Debentures will bear interest from the date of issue at a rate of 6.25% per annum, payable quarterly in arrears on the last day of March, June, September and December of each year commencing on March 31, 2011 and have a maturity date of February 8, 2017 (the "Maturity Date"). Furthermore, the Debentures are convertible, in whole or in part, at the option of the holder at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by the Company for redemption of the Debentures into common voting shares of the Company ("Common Shares") at a conversion price of $18.51 per Common Share ("Conversion Price"), subject to adjustment as provided in the indenture governing the Debentures. The Conversion Price equates to a conversion rate of 54.02 Common Shares for each $1,000 principal amount of Debentures.

Commencing on February 1, 2014 and up to and including January 31, 2016 the Company will have the option of redeeming the Debentures at a price equal to their principal amount, plus any accrued and unpaid interest thereon, provided that the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the 20 consecutive trading days, ending 5 trading days preceding the date on which notice of redemption is given, is at least 125% of the Conversion Price. Commencing on February 1, 2016, the Company will have the option of redeeming the Debentures at a price equal to their principal amount plus any accrued and unpaid interest thereon.

The Common Shares of Melcor are traded on the Toronto Stock Exchange under the symbol "MRD".

About Melcor

Melcor Developments Ltd. is a publicly traded Edmonton based real estate development company tracing its roots back to 1923. Melcor develops master planned residential communities, office and retail properties, and owns and manages commercial and golf course assets in western Canada and in the southwestern United States.

This press release may contain forward looking statements, being statements which are not historical in fact, including, without limitation, statements regarding anticipated results, revenues, costs or discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results to differ materially from those anticipated or projected. The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

Contact Information

  • Melcor Developments Ltd. - Business Contact
    Ralph B. Young
    President & CEO
    (780) 423-6931
    info@melcor.ca
    or
    Melcor Developments Ltd. - Investor Relations
    Naomi Stefura
    Corporate Controller
    (780) 945-4654
    info@melcor.ca