HALIFAX, Dec. 2, 2013 /CNW/ - Clarke Inc. ("Clarke" or the "Company")
(TSX: CKI CKI.DB.A) is providing the following clarification regarding
the recently announced proposed amendments (the "Proposed Amendments")
to its 6.00% convertible unsecured subordinated debentures due December
31, 2018 (the "Debentures").
Clarke continuously evaluates and seeks to optimize the Company's
capital structure for the benefit of all its stakeholders.
Clarke currently has cash availability and marketable securities in
excess of $150 million and expects to generate further net cash
proceeds in excess of $85 million through the sale of its freight
division by the end of the current calendar year. This provides the
Company with the financial capacity to redeem all of the $62 million of
Debentures outstanding at any time as permitted under the terms of the
indenture at a price equal to the principal amount and all accrued and
unpaid interest thereon to but excluding the date of redemption. The
interest rates on the cash available to Clarke through its credit
facilities are substantially lower than the proposed increased interest
rate on the Debentures contemplated by the Proposed Amendments.
Clarke believes that redeeming the Debentures now would result in
Debentureholders losing a premium trading security in the market today
and an attractive and recurring source of future income.
The advantages to the Debentureholders of the proposed amendments
include the following:
- Increased interest rate. Clarke believes that increasing the interest rate on the Debentures
from 6.00% to 6.50% represents an attractive opportunity for
Debentureholders to generate additional interest income which is
attractive in the current low interest rate environment and in light of
other reinvestment opportunities available.
- Consent fee. Debentureholders that vote in favour of the proposed amendments will
receive a consent fee of 25 basis points or $2.50 per $1000 principal
amount of Debentures and brokers will receive a broker fee of 75 basis
points or $7.50 per $1000 principal amount of Debentures.
- Avoid Redemption. Avoid redemption of the Debentures and losing an attractive and
recurring source of income.
The details of the proposed amendment are outlined in the management
information circular (the "Circular") that was mailed to
Debentureholders on November 26, 2013. The Circular also includes the
voting details for the upcoming meeting of Debentureholders to consider
the Proposed Amendments.
Halifax-based Clarke invests in a variety of private and publicly-traded
businesses and participates actively where necessary to enhance the
performance of such businesses and increase its return. Clarke's
securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for
more information about Clarke Inc., please visit our website at www.clarkeinc.com.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to certain forward-looking
statements relating, but not limited to, the Company's expectations,
intentions, plans and beliefs with respect to the Company. Often, but
not always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "does not expect", "is expected",
"budget", "estimates", "forecasts", "intends", "anticipates" or "does
not anticipate", or "believes", or equivalents or variations, including
negative variations, of such words and phrases, or state that certain
actions, events or results, "may", "could", "would", "should", "might"
or "will" be taken, occur or be achieved. Forward-looking statements
include, without limitation, those with respect to the future price of
securities held by the Company, changes in these securities holdings,
changes to the Company's hedging practices, currency fluctuations,
requirements for additional capital, changes to government regulations
and the timing and possible outcome of pending litigation.
Forward-looking statements rely on certain underlying assumptions that,
if not realized, can result in such forward-looking statements not
being achieved. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause the actual
results of the Company to be materially different from the historical
results or from any future results expressed or implied by such
With respect to the Company's Investment segment, such risks and
uncertainties include, without limitation, the Company's investment
strategy, legal and regulatory risks, general market risk, potential
lack of diversification in the Company's investments, reliance on
certain key executives, interest rates and foreign currency
fluctuations and other factors. With respect to the Company's Freight
Transportation segment, such risks and uncertainties include, without
limitation, competition, expiry of certain leases, labour relations,
the use of third party service providers, dependence on certain
personnel, fuel costs, weather conditions, customer relationships,
claims, litigation and insurance, government regulation of the
transport industry and other factors. With respect to the Company's
Commercial Tanks & Home Heating segment, such risks and uncertainties
include, without limitation, the costs of housing and major consumer
products, energy costs, alternative energy sources, steel costs,
product liability claims, foreign exchange risk, and other factors.
Other general risks and uncertainties include, without limitation,
environmental considerations, use of information technology and
information systems, safety issues, concentration of sales among a
small number of customers, the seasonality of business cycles for
certain segments, commodity market risk, risks associated with
investment in derivative instruments and other factors.
Although the Company has attempted to identify important factors that
could cause actions, events or results not to be as estimated or
intended, there can be no assurance that forward-looking statements
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Other than
as required by applicable Canadian securities laws, the Company does
not update or revise any such forward-looking statements to reflect
events or circumstances after the date of this document or to reflect
the occurrence of unanticipated events. Accordingly, readers should not
place undue reliance on forward-looking statements.
SOURCE: Clarke Inc.