27 October 2022
TORONTO and NEW YORK, Oct. 27, 2022 /CNW/ -, Mountain Province Diamonds Inc. ("Mountain Province" or the "Company") (TSX: MPVD) (OTC: MPVD) today announces that it has executed a non-binding term sheet with certain holders (the "Exchanging Holders") of its 8.000% Senior Secured Second Lien Notes due 2022 (the "Existing Notes"), including entities ultimately beneficially owned by the Company's largest beneficial shareholder, Mr. Dermot Desmond, for a partial refinancing of the Existing Notes. The term sheet sets forth the terms of a transaction (the "Proposed Transaction") in which the Exchanging Holders will exchange Existing Notes for new senior secured second lien loan notes (the "New Loan Notes"). While the arrangements are non-binding, Mountain Province is working with the Exchanging Holders in an effort to promptly reach binding agreements. The issuance of the New Loan Notes is subject to, among other things, finalization of the specific terms thereof, the negotiation and execution of definitive documentation, and regulatory and disinterested shareholder approval.
The Proposed Transaction is currently expected to include the exchange of approximately US$190.0 million aggregate principal amount of Existing Notes for approximately US$195.9 million aggregate principal amount of New Loan Notes. Approximately US$65.3 million of the New Loan Notes will be acquired by entities ultimately beneficially owned by Mr. Desmond. The New Loan Notes are expected to be secured by the same assets that secure the Existing Notes and on a second lien priority basis, bear interest at a rate of 9.0% per annum and have a three-year term. The Company expects to retire the remaining balance of the Existing Notes with cash on hand concurrently with the consummation of the Proposed Transaction. The Proposed Transaction is not expected to involve the issuance of new equity.
A special committee (the "Special Committee") of the board of directors of the Company (the "Board") is providing consideration and oversight of the Proposed Transaction as well as any other potential alternative transactions intended to refinance in part the Existing Notes. The Special Committee consists of independent directors who have no direct or indirect interest in the Proposed Transaction. Following its review process, the Special Committee recommended that the Board approve the execution of the term sheet setting out the terms of the Proposed Transaction.
Due to the participation of entities ultimately beneficially owned by Mr. Desmond, the Proposed Transaction is subject to the approval of the Toronto Stock Exchange (the "TSX") and the approval of the Company's disinterested shareholders in accordance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and the rules of the TSX.
The Proposed Transaction is subject to the execution of definitive documentation and the approvals described above. There can be no assurance that the Proposed Transaction will be completed on the terms described herein or at all.