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Steve Brown

A majority of the Fund’s unitholders have consented in writing to the Refinancing and Recapitalization, including the issuance of new equity units and warrants detailed below.

The following are the key elements of the changes to Cinram’s capital structure that would result from the proposed transactions:

  • December 31, 2013
  • US$367 million US$120 million
  • US$30 million
  • US$90 million US$90 million December 31, 2011
  • US$100 million to US$35 million
  • February 10, 2011
  • The issuance of warrants to acquire 13 million Cinram units.
  • US$275 million December 31, 2010 US$164.4 million

    February 10, 2011 pro rata US$11.2 million June 30, 2011 Canada Business Corporations Act

    Cinram will pursue opportunities to raise capital to repay the mandatorily exchangeable secured debt.

    A summary of the key changes to Cinram’s capital structure resulting from these transactions is attached as a schedule to this press release.

    Cinram retained Goldman, Sachs & Co. to act as its financial advisor to assist the Fund with the Refinancing and Recapitalization.

    About Cinram

    North America Europe North America

    Certain statements included in this release constitute "forward-looking statements" within the meaning of applicable securities laws.  Such forward-looking statements include statements concerning the possible effects of the transactions described herein, and the likelihood of their successful completion. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, or results of the multimedia duplication/ replication industry, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, among others, the following: the Fund’s ability to retain major customers; general economic and business conditions, which will, among other things, impact the demand for the Fund’s products and services; multimedia replication industry conditions and capacity; the ability of the Fund to implement its business strategy; the Fund’s ability to invest successfully in new technologies and other factors which are described in the Fund’s filings with the securities commissions. These risks may affect the achievement of the expected results of the transactions described herein.  There can be no assurance that the said transactions will be successfully completed or that, if completed, the expected consequences will result in whole or in part, and the deviations from such expectations may be material.


    Key Terms of the Refinancing and Recapitalization

    The following is a summary of the principal economic terms of the amended Credit Facility after giving effect to the Refinancing and Recapitalization:

    Amount of Term Loan:     Approximately US$247 million
    Revolving Commitments:    
    Maturity Date:     December 31, 2013
    Interest Rate on Term Loan:    

    Interest Rate on Revolver:    
    Revolver Commitment Fee:     125 bps
    Amortization of Term Loan:     1.25% of closing date amount per quarter beginning Q1 2011, increasing to 2.5% per quarter in Q3 2012 and beyond, subject to certain minimum liquidity provisions

    The following is a summary of the principal economic terms of the Mandatorily Exchangeable Secured Debt:

    Issuer:     CII
    Amount:     US$90 million
    Security:     Second lien on all Credit Facility collateral
    Coupon:     15% per annum (quarterly compounded), PIK until maturity
    Maturity/Redemption:     December 31, 2011; mandatorily redeemable without fee or penalty with the net cash proceeds of any equity raise
    Exchange if no Equity Raise:     At December 31, 2011, mandatorily exchanges into common interests of the Fund at the lesser of (i) $0.242 per unit, subject to customary adjustments, and (ii) the lowest price per unit at which any equity is raised on or before December 31, 2011
    Treatment of Interest:     Paid in cash (i) with respect to all or any portion of the principal repaid prior to maturity or (ii) at maturity, subject to the company’s election not to pay interest in cash at maturity in certain circumstances, in which case, each Lender has the option to exchange its ratable share of capitalized and accrued interest to equity at the same price as principal or to retain a continuing second lien debt claim (at 15% PIK interest per annum) until December 31, 2013 (at which time the remaining balance shall be paid in cash)

    The following is a summary of selected terms of the warrants:

    Amount:           Warrants to purchase 13 million units of the Fund

    Price:           The initial strike price is $1.10.  The strike price will be recalculated upon any exchange of part or all of the mandatorily exchangeable secured debt or equity raise and will be set at the lowest of (i) $1.10, (ii) the lowest per unit price at which Cinram raises new equity on or before December 31, 2011, and (iii) the per unit price resulting from any exchange of the mandatorily exchangeable secured debt.

    SOURCE Cinram International Income Fund

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