First Uranium had two assets: a profitable Mine Waste Solutions asset, which was sold to AngloGold Ashanti for $335 million in cash; and a woefully cash-sucking and unprofitable Ezulwini mine, which was sold for $70 million in cash.
Most notably is the impact to the debtholders. The subordinated convertible debentures get the following (if they approve of the various changes proposed):
Furthermore, Debenture holders will agree to accept on closing of the Transactions a cash payment of 95% of the principal amount of the Debentures, an additional 2% of the principal amount if they have executed and delivered a validly completed form of election proxy voted in favour of the Company’s proposals on or before the early consent deadline to be set (the 2% will be allocated pro rata to holders tendering by the deadline) and an additional payment of the lesser of (i) 3% of the principal amount or (ii) the total amount released to the Company from the Escrows, in priority to any distribution to FIU shareholders from the Escrows.
It is likely that these holders will receive 97% of principal value, which is significantly better than the 70% the market had them pegged at a week ago. The debenture holders will have no choice to accept the deal since otherwise they will be converted into common equity of the company.
Debentures (TSX: FIU.DB) are trading at bid/ask 90/91 cents on the dollar, so people wanting to pick up the cigar butt off the street for one last puff still have a shot here.
The noteholders will get paid 100% of par value, and also accrue interest up to March 31, 2012. They are likely to be made whole whether they vote for or against the agreement; in the event they vote against the agreement, it brings up an interesting risk scenario. I am wondering why the company did not include a small sweetener for the noteholders as they have the ability to really botch things up for the company by voting against a change in their sledgehammer clause which gives them security over both Mine Waste Solutions and Ezulwini.
Notes (TSX: FIU.NT) are trading at bid/ask 96.5/98.5, so again, there is opportunity to squeak out a few percentage points at the risk of having your capital wound up in some calamity in the unlikely event the vote fails.
Once this is done, the rest of the corporation is going to be winded up.
This ends the sad, sad tale of First Uranium. Onto bigger and better things.