- Mining company Minnova (MCI) has agreed to settle an aggregate C$600,000 in debts, which it owes to various creditors
- The company will settle the debt by issuing 3 million common shares at a price of $0.20 each
- This settlement constitutes a related party transaction, since 2.5 million of those common shares will be issued to company insiders
- The debt settlement will immediately improve the company’s financial position
- Minnova (MCI) was trading for $0.14 per share at 10:59am yesterday
Mining company Minnova (MCI) has agreed to settle an aggregate C$600,000 in debts, which it owes to various creditors.
The total debt sum consists of amounts owed by the company to certain arm’s length and non-arm’s length creditors.
Minnova has agreed to clear this debt by issuing 3 million common shares in the capital of the company. The common Minnova shares will be issued at $0.20 per common share.
All of the common shares which are issued through the debt settlement are subject to a statutory hold period, per applicable securities laws. The hold period will last for four months and one day from the date on which the common shares are issued.
Minnova’s debt settlement process, and the related issuance of shares remains subject to the approval of the TSX Venture Exchange.
Of the 3 million shares which will be issued, an aggregate 2.5 million will be issued to insiders of the company. As such, the debt settlement constitutes a related party transaction.
However, Minnova may be able to avoid the usual formal valuation and minority approval requirements of a related party transaction. This is because the fair market value of the transaction does not exceed 25 per cent of the company’s market capitalisation.
Minnova also has a shorter period of time to file a material change report for the transaction. This is because it was necessary for the company to complete the debt settlement in order to immediately improve its overall financial position.
Minnova (MCI) was trading for $0.14 per share, as of 10:59am on July 9, 2020.
