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Silver Bear Announces Renegotiation Of Existing Convertible Notes
November 23, 2016 – Toronto, Ontario
Silver Bear Resources Inc. ("Silver Bear" or the "Company") (TSX: SBR) is pleased to announce that the Company's major shareholders, A.B. Aterra Resources Ltd. ("Aterra") and Inflection Management Corporation ("Inflection") have entered into negotiations with the Company to undertake a restructuring of their outstanding convertible notes and a new financing process with the objective of reducing dilution and mitigating the possible impact on liquidity which the full conversion of the notes by December 31, 2016 would entail.
Aterra currently holds convertible notes with a principal amount of CDN$4.505 million and Inflection a principal amount of CDN$13.51 million, all of which were initially issued in December 2015.
The discussions revolve around Aterra and Inflection converting a to-be-agreed portion of the principal amount of the existing convertible notes into common shares, such that their combined common share ownership would not exceed 65% on completion of the restructuring. In addition, Aterra and Inflection would agree to exchange the remaining principal amount for new convertible notes to be priced in the context of the market, and also placed with new institutional investors.
If necessary, Aterra and Inflection have indicated that they would be willing to extend the term of their existing convertible notes from December 31, 2016 until March 31, 2017 (the “Note Extension”) to facilitate the negotiations.
The Note Extension, if agreed, will be subject to the approval of the Board of the Company and the Toronto Stock Exchange (“TSX”).
Discussions regarding the restructuring and new convertible note financing are at an early stage, and no assurance can be provided that either will be completed and accordingly, whether an extension of the existing convertible notes will be forthcoming.
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