OTTAWA, ONTARIO -- (Marketwired) -- 09/10/13 -- Enablence Technologies Inc. ("Enablence" or the "Company") (TSX VENTURE: ENA), a leading supplier of optical components and subsystems for access, metro and long-haul markets, announced today that it has closed the $12,000,000 equity financing transaction ("Equity Transaction") resulting in the completion of the $15,000,000 financing transaction ("Financing Transaction") as previously announced on July 17, 2013, and the retirement of all the remaining secured subordinated promissory notes.
The Equity Transaction is part of a larger $15,000,000 financing transaction ("Financing Transaction") which includes the previously announced $3,000,000 convertible bridge loan ("Bridge Loan") borrowed by the Company from an affiliated entity of China Tricomm Ltd. ("China TriComm"). The $12,000,000 Equity Transaction is structured as follows: China TriComm and another investor subscribed for 45,000,000 common shares at an issue price of $0.20 per share. China TriComm is an investment company which is under common ownership with Zhejiang Chuangyi Technologies, a leading integrated infrastructure equipment and solution provider for the cable industry in China. Two insiders of Enablence subscribed for an additional 15,000,000 common shares also at $0.20 per share ("Related Party Transaction"). Each insider is a related party within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The independent directors of the Company, being all the directors of the Company, have determined that an exemption is available from the formal valuation requirements and minority shareholder approval requirements under MI 61-101 and unanimously approved the Financing Transaction, including the Related Party Transaction. This information is being filed less than 21 days prior to the expected closing of the Related Party Transaction. The shorter filing period was necessary in order to permit the Company to close the Equity Financing, including the Related Party Transaction, in a time frame consistent with the usual market practice for transactions of this nature.
At the closing of the $12,000,000 Equity Transaction, the $3,000,000 Bridge Loan was converted into 20,000,000 common shares of Enablence at $0.15 per share pursuant to the terms previously announced. A finder's fee is being paid to an arm's length party in connection with the Financing Transaction in the amount of 3,600,000 common shares of Enablence. All common shares issued as a result of the Equity Transaction, conversion of the Bridge Loan and in respect of the finder's fee, are subject to a four month restricted period.
In connection with the Financing Transaction, approximately US$11.7 million of secured subordinated promissory notes were exchanged for total cash payments of approximately US$3.8 million and the issuance of 19,865,145 common shares of Enablence at a deemed price of $0.20 per share. These payments constitute a full and final settlement of the secured subordinated promissory notes. Additionally, the Company has issued 540,000 common shares, at a deemed price of $0.37 per share, in connection with additional debts incurred as a result of the equity and debt settlement transactions described above. All shares issued in connection with the settlement of the debt arrangements are subject to a four month restricted period.
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