HONG KONG, Aug. 16, 2018 (GLOBE NEWSWIRE) -- GEMS Investment Management Limited (“GEMS”) announces that on August 15, 2018, Primeline Energy Holdings Inc. (“Primeline”) redeemed $US 10 million principal amount of Tranche A Bonds issued by Primeline to GRF Prime Limited (“GRF Prime”), a special purpose vehicle owned by a resources fund managed by GEMS (GEMS as fund manager has control and direction over all securities beneficially owned by GRF Prime) on August 14, 2015 for a payment of US$ 11,295,000 ($Cdn. 14,781,767 at the Bank of Canada rate of conversion of $Cdn. to $US of $1.3087 on August 14, 2018) in accordance with their terms. The Tranche A Bonds were convertible into Common Shares at a price of Cdn. $0.70 per share.
At the close of business on August 14, 2018, GEMS had control and direction over 16,580,702 Common Shares, $US 10 million principal amount of Tranche A Bonds and $US 8 million principal amount of Tranche B Bonds issued by Primeline to GRF Prime on November 10, 2015 convertible into Common Shares at a price of Cdn. $0.85 per share. The term of the Tranche B Bonds is three years, extendable at the option of the holder for two one year periods. Interest is payable quarterly at 7% per annum, of which 4.5% is payable in cash and 2.5% in Common Shares (“Share Interest”).
At the Bank of Canada rate for conversion of $Cdn. to $US of 1.3087 on August 14, 2018, 18,695,714 Common Shares were issuable upon conversion of the Tranche A Bonds, and 12,317,176 Common Shares were issuable upon conversion of the Tranche B Bonds. Assuming conversion of the Tranche A Bonds and Tranche B Bonds, GEMS had control and direction over 47,593,593 Common Shares, representing 21% of the issued and outstanding shares of Primeline. At the close of business on August 15, 2018 GEMS had control or direction over 28,897,878 Common Shares assuming conversion of the Tranche B Bonds, representing 13.9% of the issued and outstanding Common Shares of Primeline, representing a change in the percentage of the issued and outstanding shares over which GEMS had control or direction of 7.1%.
GRF Prime will acquire beneficial ownership of further Common Shares as Share Interest, and may convert Tranche B Bonds, or purchase or sell Common Shares in the market, in the future depending on market conditions and other factors relevant to GEMS’ investment decisions. It has no plans or future intentions by itself or with any joint actors which relate to or would result in: a corporate transaction involving Primeline or any of its subsidiaries; a sale or transfer of a material amount of Primeline’s assets or those of any of its subsidiaries; a material change in the present capitalization or dividend policy of Primeline; a material change in Primeline’s business or corporate structure; a change in Primeline’s Articles or another action which might impede the acquisition of control of Primeline by any person or company; any class of Primeline’s securities being delisted from the TSX-V; Primeline ceasing to be a reporting issuer in any jurisdiction of Canada; a solicitation of proxies from Primeline’s securityholders; or any similar action or actions. Pursuant to the subscription agreement for the Tranche B Bonds, GRF Prime is entitled to appoint one director to Primeline’s Board of Directors. GEMS does not presently intend that GRF Prime will continue to exercise such rights under the subscription agreement. GEMS has no further plans or future intentions that would result in a change in the board of directors or management of Primeline, including any plans to change the number or term of directors or fill any existing vacancy on the board.
A copy of GEMS’ early warning report relating to the transactions described above can be obtained from Rita Kwok, Tel. +852-2838 0093