Shareholders of Thistle Mining (THT-T) bolted for the exits in early trading in Toronto on Dec. 21, after the company announced a restructuring plan that would see existing shares cancelled.
Under the plan, Bermuda-based private investment company Meridian Capital would be issued 70% of Thistle new equity; the holders of secured and unsecured convertible loan notes would own 25%; the remaining 5% would be distributed among Thistle’s unsecured creditors and existing shareholders.
“The 5% of new equity to be issued by Thistle to its affected unsecured creditors and its existing shareholders upon implementation will be allocated between them in a manner to be determined by Meridian Capital,” Thistle said in a prepared statement.
The number of new shares that make it into the hands of existing shareholders will depend on the number claims by unsecured creditors.
Following the restructuring, Thistle will owe Meridian US$ 20 million.
Meridian acquired Thistle’s senior credit documents from Standard Bank London and the Standard Bank of South Africa in early November. The deal saw Standard Bank London withdraw its notice of default on debt repayment issued to Thistle (T.N.M., Nov. 26-Dec. 2/04).
Thistle says holders of a significant principal amount of its secured convertible loan notes support the plan. The first step in the restructuring will be an application to the Companies’ Creditors Arrangement Act (Canada) in Ontario early next year.
Thistle was off 2, or 66.7%, at 1 with more than 26 million shares crossing the floor in morning trading in Toronto on Dec. 21.
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