Ms. Sarah Van Lange reports
CINEPLEX ANNOUNCES PRICING OF CONVERTIBLE DEBENTURE OFFERING
Cineplex Inc. has priced its previously announced marketed public offering of convertible unsecured subordinated debentures for aggregate gross proceeds of $275-million.
The company will also grant the underwriters an overallotment option to purchase up to an additional 15 per cent of the debentures to be sold pursuant to the offering. The overallotment option will be exercisable for a period of 30 days from the closing date of the offering.
The offering is being made through a syndicate of underwriters led by Scotiabank and including BMO Capital Markets, RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and TD Securities Inc.
The debentures will mature and be repayable on Sept. 30, 2025, and will bear interest at an annual rate of 5.75 per cent, payable semi-annually in arrears on Sept. 30 and March 31 in each year, commencing on Sept. 30, 2020. At the holder's option, the debentures may be converted into common shares of the company at any time prior to the close of business on the earlier of: (i) five business days prior to the maturity date, and (ii) if called for redemption, five business days immediately preceding the date fixed for redemption of the debentures, at a conversion price of $10.94 per common share, being a conversion rate of approximately 91.4077 common shares for each $1,000 principal amount of debentures, subject to adjustment in certain events.
The debentures will be direct, unsecured subordinated obligations of the company, subordinated to any senior indebtedness of the company and ranking equally with one another and with all other existing and future unsecured subordinated indebtedness of the company.
The debentures will not be redeemable by the company prior to Sept. 30, 2023. On or after Sept. 30, 2023, and prior to Sept. 30, 2024, the company may, at its option, redeem the debentures in whole or in part from time to time provided that the volume-weighted average trading price of the shares of the company on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125 per cent of the conversion price. On or after Sept. 30, 2024, the debentures may be redeemed, in whole or in part from time to time at the option of the company, at a price equal to their principal amount plus accrued and unpaid interest.
The company will use the net proceeds of the offering to repay indebtedness under its credit facilities, of which $100-million would be a permanent repayment and the balance would be available for borrowing under the company's revolving credit facility.
The offering is expected to close on or about July 15, 2020, subject to various conditions, including the approval of the Toronto Stock Exchange.
A final short-form prospectus containing important information relating to the debentures will be filed with securities regulatory authorities in each of the provinces and territories of Canada. Copies of the final short-form prospectus, when available, may be obtained from Scotia Capital Inc. at 40 King St. West, Toronto, Ont., M5H 3Y2 (e-mail: firstname.lastname@example.org). A copy of the final short-form prospectus, when available, can also be obtained under Cineplex's corporate profile on SEDAR. There will not be any sale or any acceptance of an offer to buy the debentures until a receipt for the final short-form prospectus has been issued.
About Cineplex Inc.
Cineplex is a top-tier Canadian brand that operates in the film entertainment and content, amusement and leisure, and media sectors. As a leading entertainment and media company, Cineplex welcomes millions of guests annually through its circuit of theatres and location-based entertainment (LBE) venues across the country. In addition to being Canada's largest and most innovative film exhibitor, Cineplex also operates successful businesses in digital commerce (Cineplex store), food service and alternative programming (Cineplex events), cinema media (Cineplex media), digital place-based media (Cineplex digital media), and amusement solutions (Player One Amusement Group). Additionally, Cineplex operates an LBE business through Canada's newest destinations for eats and entertainment (the Rec Room) and entertainment complexes specifically designed for teens and families (Playdium).
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.