Pinetree Capital Announces Proposal to Amend Terms of Convertible Debentures

TORONTO, CANADA--(Marketwired - Aug. 19, 2013) -

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Pinetree Capital Ltd. ("Pinetree") (TSX:PNP) (TSX:PNP.DB) announces that it is seeking the approval of the holders of its 8.0% convertible unsecured subordinated debentures due May 31, 2016 (the "Debentures") to amend the terms of the Debentures at an extraordinary meeting of Debentureholders to be held on September 12, 2013 (the "Meeting"). Pinetree is also soliciting written consents in favour of the proposed amendments from Debentureholders.

The Proposed Amendments

The proposed Debenture amendments will:

• increase the interest rate payable on the Debentures from 8.0% to 10.0% per annum, effective as of November 30, 2013;
  
  
• amend one of the debt covenants (the "Covenant") in the indenture governing the Debentures (the "Indenture") to provide that, for a period of nine months, Pinetree's debt-to-assets ratio cannot exceed 50%, rather than the current 33% limit; and
  
  
• waive any event of default resulting from a breach of the Covenant that occurred prior to the date of the amendments.
  
  

As previously disclosed by Pinetree, it was given notice by the trustee under the Indenture that it was not in compliance with the Covenant as at June 30, 2013, and has until September 13, 2013 to cure or obtain a waiver for the default.

Consent Fee

If the Debenture amendments are approved, and certain other conditions precedent are satisfied or waived, Pinetree will pay to each Debentureholder that approved the amendments a consent fee equal to $60 for each $1,000 principal amount of Debentures owned by the Debentureholder that is voted in favour of the amendments (the "Consent Fee").

The Consent Fee will be paid in cash, provided that any Debentureholder who is a Canadian resident and is otherwise eligible will be entitled to receive the Consent Fee in common shares of Pinetree, on the basis of 180 common shares for every $1,000 principal amount of the Debentureholder's Debentures that are voted in favour of the Debenture amendments. Common shares issued in satisfaction of the Consent Fee will be subject to a four-month hold period in accordance with applicable securities laws.

Board Recommendation

Pinetree's board of directors has unanimously concluded that the Debenture amendments are in the best interests of Pinetree and unanimously recommends that Debentureholders vote FOR the Debenture amendments.

Approval of the Proposed Amendments

For the Debenture amendments to be adopted, either:

• holders of at least 66 2/3% of the principal amount of the Debentures, present or represented by proxy at the Meeting, must vote FOR the Debenture amendments at the Meeting; or
  
  
• holders of at least 66 2/3% of the outstanding principal amount of the Debentures must approve the Debenture amendments in writing.
  
  

If the Debenture amendments are validly approved by Debentureholders in writing prior to the date of the Meeting, the Meeting will be cancelled and will not proceed.

Support Agreements

Pinetree has entered into support agreements with Debentureholders who collectively own in excess of $26.7 million principal amount of Debentures, representing approximately 43.9% of the principal amount of Debentures outstanding, pursuant to which the Debentureholders have agreed, among other things, that they will vote all of their Debentures in favour of the Debenture amendments.

Pursuant to these support agreements, Pinetree has agreed, among other things, that if the Debenture amendments are approved, it will use its best efforts to repurchase an additional $20 million principal amount of Debentures through normal course and substantial issuer bids and undertake an equity financing to raise at least $5 million.

The Meeting and Further Information

The Meeting will be held at 130 King Street West, Suite 2500, Toronto, Ontario, M5X 2A2, on September 12, 2013 at 11:00 a.m. (Eastern Standard Time). The record date for determining the Debentureholders entitled to receive notice of and vote at the Meeting is August 13, 2013.

Further information with respect to the Debenture amendments is outlined in a management information circular that is being mailed to Debentureholders and available at www.sedar.com under Pinetree's corporate profile.

About Pinetree

Pinetree was incorporated under the laws of the Province of Ontario and its shares are publicly-traded on the Toronto Stock Exchange under the symbol "PNP". Pinetree is a diversified investment and venture capital firm focused on the small cap market. Pinetree's investments are primarily in the resources sector: Precious Metals, Base Metals, Oil and Gas, Potash, Lithium and Rare Earths, Uranium and Coal. Pinetree's investment approach is to develop a macro view of a sector, build a position consistent with the view by identifying micro-cap opportunities within that sector, and devise an exit strategy designed to maximize our relative return in light of changing fundamentals and opportunities. Pinetree is recognized as a value-added partner in the resource industry.