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Cardero Resource Corp (2)
Symbol CDU
Shares Issued 73,939,213
Close 2019-11-04 C$ 0.025
Recent Sedar Documents

Cardero to convert 12M pref shares to 48M common shares

2019-11-08 10:55 ET - News Release

Mr. Stuart Ross reports

CARDERO ANNOUNCES PROPOSED AMENDMENTS TO PREFERRED SHARES

Cardero Resource Corp. has executed a debt settlement agreement dated Nov. 6, 2019, with Kopple Family Partnership LP and E.L. II Properties Trust, which proposes certain amendments to the special rights and restrictions applicable to the company's 12 million currently outstanding preferred shares, which would, subject to receipt of shareholder and TSX Venture Exchange approval, result in their conversion into 48 million common shares of the company.

The company will seek the required shareholder approval at an extraordinary meeting to be held on Dec. 16, 2019, in Vancouver, B.C. Details of the proposed amendments to the special rights and restrictions applicable to the preferred shares and their proposed conversion will be outlined in an information circular to be published on or around Nov. 15, 2019, and are summarized in this news release.

The preferred shares were issued to the creditors on Oct. 15, 2015, pursuant to an overall debt restructuring plan then completed by the company. The preferred shares have voting rights equivalent to the company's common shares, priority over the common shares in relation to the payment of dividends, a right of conversion into common shares on a one-for-one basis and a fixed cumulate dividend rate of 8.0 per cent of par value (being equal to the price) per year payable yearly.

Pursuant to the debt settlement agreement, the company will, subject to receipt of shareholder approval via ordinary resolution, amend the special rights and restrictions applicable to the preferred shares to allow them to be settled and converted into an aggregate of 48 million common shares of the company at a deemed price of five cents per common share, representing a conversion ratio of four common shares issuable for each preferred share held. The debt settlement agreement does not contemplate the conversion of the accrued and unpaid dividends, which will remain as a debt owed by the company to the creditors.

The creditors are affiliates of Robert C. Kopple of Los Angeles, Calif., who is a director of the company, and, as a result thereof, the transaction contemplated by the debt settlement agreement is a related party transaction under the provisions of Multilateral Instrument 61-101 -- Protection of Minority Securityholders in Special Transactions, and, therefore, in addition to the shareholder approval required to amend the special right and restrictions applicable to the preferred shares, is subject to majority of the minority shareholder approval, with the votes of shares held by Mr. Kopple and his associates and affiliates being excluded.

The common shares issuable upon the conversion of the preferred shares, as amended, would be issued subject to applicable resale restrictions under Canadian and U.S. securities laws and will bear a four-month hold period.

We seek Safe Harbor.

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