Inter-Rock Announces Shares for Debt Transaction
October 10 2008 - 12:06PM
Marketwired
Inter-Rock Minerals Inc. (TSX VENTURE: IRO) ("Inter-Rock", or, the
"Corporation") is pleased to announce that, subject to shareholder
approval, it proposes to repay an outstanding shareholder loan with
preferred shares of the Corporation (the "Transaction"). The
outstanding principal and accrued unpaid interest of approximately
US$3,200,000 owing to the Cromwell Trust will be exchanged for
preferred shares of the Corporation at a price of C$0.25 per
preferred share, representing a 30% premium to the net asset value
of the Corporation and a 65% premium to the current share price.
The preferred shares will be voting, redeemable, retractable,
convertible and will pay a non-cumulative dividend equivalent to
the US prime rate as declared from time to time.
The accrued and unpaid interest on the shareholder loan has been
steadily increasing due to the compounding and accumulation of
unpaid interest. The Corporation's cash flow is used to service
senior bank debt incurred to acquire and develop industrial mineral
business interests. The exchange of the shareholder loan for the
preferred shares will completely eliminate the steady increase in
the interest payable on the shareholder loan debt.
A special committee (the "Committee") of independent directors
of the Corporation has reviewed the Transaction. The Committee has
determined that the Transaction is fair to shareholders and has
recommended the Transaction to the Corporation's board and
shareholders. The Corporation has also received conditional
approval for the proposed Transaction from the TSX Venture
Exchange.
Minority approval of the Transaction is required pursuant to
Multi-lateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions. Accordingly, the Corporation will
call a shareholders' meeting to approve the transaction in due
course.
"I believe the Transaction will strengthen Inter-Rock's balance
sheet and, in turn, its ability to obtain new financing needed to
explore existing projects or to pursue industrial minerals
opportunities", said Michael Crombie, President of Inter-Rock. "At
the same time, shareholders should benefit from enhanced
liquidity".
Additional information is available at
www.inter-rockminerals.com and on SEDAR at www.sedar.com.
No stock exchange or securities regulatory authority has
reviewed or accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Inter-Rock Minerals Inc. Michael B. Crombie President
(416) 367-3003 (416) 367-3638 (FAX) Email: iro@on.aibn.com Website:
www.inter-rockminerals.com
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