Crown Capital Announces Additional Amendment to Provide Security for Debentures, Mailing of Meeting Materials For Debentureholder Meeting and Encourages Debentureholders to Participate and Vote

• Any Debentureholder that votes for the Debentureholder Resolution will receive a cash consent fee of $10 per $1,000 principal amount of Debentures held by the Debentureholder.
• The deadline to submit vote is October 16, 2024, on or before 10:00 a.m. (Eastern Time).

CALGARY, AB, Sept. 16, 2024 /CNW/ - Crown Capital Partners Inc. ("Crown" or the "Corporation") (TSX: CRWN) today announced that it has mailed an information circular (the "Circular") and related meeting materials (collectively, the "Meeting Materials") in connection with the upcoming special meeting of the holders (the "Debentureholders") of its 10% unsecured subordinated debentures due December 31, 2024 (the "Debentures") to be held at the offices of the Corporation, 33 Yonge Street, Suite 901, Toronto, ON, M5E 1G4, on October 18, 2024 at 10:00 a.m. (Eastern Time) (the "Meeting").

As previously announced by Crown, at the Meeting, Debentureholders will be asked to consider and vote upon a resolution (the "Debentureholder Resolution") that, if approved, would:

1. authorize and approve certain amendments (the "Initial Debenture Amendments") to the terms of the Debentures to: (i) extend the maturity date of the Debentures from December 31, 2024 to December 31, 2026; (ii) amend the interest rate on the Debentures from 10% to 11% effective a minimum of five trading days following the approval of the Debentureholder Resolution and from 11% to 12% effective as of December 31, 2025; and (iii) amend the interest payment dates from occurring semi-annually on June 30 and December 31 of each year to occurring annually on December 31 of each year, with the next payment to occur effective December 31, 2025 for the interest accrued on the Debentures from June 30, 2024 up to, but excluding, December 31, 2025; and
2. waive the default by the Corporation under the Indenture for the failure to make the interest payment on the Debentures (the "Deferred Interest Payment") due on June 30, 2024 (the "Default Waiver"), subject to the requirement that the Corporation make the Deferred Interest Payment to Debentureholders within 60 days of the approval of Debentureholder Resolution (the "Deferred Interest Payment Deadline"). The Deferred Interest Payment will be made to Debentureholders holding Debentures as of a record date to be set by the Corporation following the Meeting. In the event that the Deferred Interest Payment is not made by the Deferred Interest Payment Deadline, the Default Waiver will be of no further force or effect.

In addition to the Initial Debenture Amendments, the Corporation has determined to further amend the terms of the Debentures (the "Additional Debenture Amendment" and, together with the Initial Debenture Amendments, the "Debenture Amendments") to grant a security interest to TSX Trust Company (the "Indenture Trustee"), as trustee for the Debentures, for the repayment of the Debentures by way of a charge to and in favor of the Indenture Trustee on all the Corporation's property and assets, subject only to Permitted Encumbrances (as defined in the second amended and restated trust indenture attached on Schedule "B" of the Circular (the "Amended Indenture")). Such security shall be subordinate to Senior Security (as defined in the Amended Indenture) and rank pari passu with any Pari Passu Debt (as defined in the Amended Indenture). In addition, the amount of Senior Indebtedness (as defined in the Amended Indenture) permitted to be incurred by the Corporation ranking in priority to the Debentures shall be limited to no more than $30,000,000.

If the Debentureholder Resolution is approved, the board of directors of the Corporation believe that the Debenture Amendments and Default Waiver will provide the following benefits to Debentureholders:

1. Payment of Deferred Interest Payment:  The Corporation believes that the extension of the maturity date will allow it to be in a better position to pay the Deferred Interest Payment to the Debentureholders by the Deferred Interest Payment Deadline.
2. Improved Security for the Debentures. The Debentures shall be granted a security interest by the Corporation by way of a charge to and in favor of the Indenture Trustee on all the Corporation's property and assets, subject only to Permitted Encumbrances. The Debentures shall be subordinate to Senior Security and rank pari passu with any Pari Passu Debt. The amount of Senior Indebtedness (as defined in the Amended Indenture) permitted to be incurred by the Corporation ranking in priority to the Debentures shall be limited to no more than $30,000,000.
3. Extension of Maturity Date: The extension of the maturity date will afford Debentureholders a longer period of time during which to receive interest at a favourable rate and will provide the Corporation with additional time to fund the repayment of the Debentures from the proceeds of asset sales or otherwise.
4. Increased Interest Rate: Increasing the interest rate from 10% to 11% effective a minimum of five trading days following the approval of the Debentureholder Resolution and from 11% to 12% effective December 31, 2025 provides a more attractive yield to Debentureholders.
5. Consent Fee: Any Debentureholder that votes for the Debenture Amendments will receive a cash consent fee (the "Consent Fee") of $10 per $1,000 principal amount of Debentures held by that Debentureholder as of September 5, 2024 (the "Record Date") provided that certain other conditions required for the payment of the Consent Fee are satisfied, including the Debenture Amendments are validly approved by Debentureholders.

The effective date of the Debenture Amendments will be a minimum of five trading days following the approval of the Debentureholder Resolution. Further particulars of the expected benefits of the Debenture Amendments and Default Waiver are described in the Circular, which is available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

The Debentureholder Resolution will only be effective if passed by an extraordinary resolution of the holders of at least 66 ⅔% of the principal amount of the Debentures present in person or by proxy at the Meeting and entitled to vote in respect of the Debentureholder Resolution. Management recommends that Debentureholders vote in favor of the Debentureholder Resolution.

The TSX has conditionally approved the Debenture Amendments. The Debenture Amendments remain subject to the final approval of the TSX.

Debentureholders may vote on or before 10:00 a.m. (Eastern Time) on October 16, 2024 by following the voting instructions set out in the Circular. Only Debentureholders of record at the close of business on the Record Date will be entitled to vote at the Meeting.

Debentureholder Questions 

Debentureholders who have any questions or require assistance with voting may contact Michael Overvelde, the Chief Financial Officer of the Corporation as set forth below.

About Crown Capital Partners (TSX:CRWN)

Founded in 2000 within Crown Life Insurance Company, Crown Capital Partners is a capital partner to entrepreneurs and growth businesses mainly operating in the telecommunications infrastructure, distribution services, and distributed power markets. We focus on growth industries that require a specialized capital partner, and we aim to create long-term value by acting as both a direct investor in operating businesses serving these markets and as a manager of investment funds for institutional partners. For additional information, please visit crowncapital.ca.

FORWARD-LOOKING STATEMENTS

This news release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the Debenture Amendments, the Default Waiver, the anticipated payment of the Deferred Interest Payment, the timing and value of potential asset sales, and management's intended uses of the proceeds of asset sales. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown's periodic filings with Canadian securities regulators. See Crown's most recent annual information form for a detailed discussion of the risk factors affecting Crown. In addition, Crown's dividend policy will be reviewed from time to time in the context of the Corporation's earnings, financial requirements for its operations, and other relevant factors and the declaration of a dividend will always be at the discretion of the board of directors of the Corporation. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

SOURCE Crown Capital Partners Inc.

For further information, please contact: Michael Overvelde, Chief Financial Officer, [email protected], [phone]