Mountain China Signs Debt Settlement Agreement with Melco
29 Maio 2012 - 8:34PM
Marketwired Canada
Mountain China Resorts (Holding) Limited (TSX VENTURE:MCG) ("MCR" or the
"Company"), announces that it has completed its negotiation for debt settlement
with Melco Leisure and Entertainment Group Limited ("Melco"). In November of
2008, Melco loaned US$12,000,000 (the "MCR Loan") to the Company and
US$11,000,000 (the "MCRI Loan") to the Company's Cayman subsidiary, Mountain
China Resorts Investment Limited ("MCRI"), for an aggregate amount of
US$23,000,000 (the "the Total Principal Amount"). As of May 29, 2012, the Total
Principal Amount remained outstanding.
The Company entered into a Debt Settlement Agreement with Melco to provide for
settlement of the MCR Loan and MCRI Loan by a combination of cash, shares and
transfer of properties, so that the Company may better deploy its working
capital in operations of its business. The Debt Settlement Agreement was
subsequently amended by an Amended and Restated Debt Settlement Agreement dated
May 29, 2012 to clarify details of the loan settlement mechanism and procedures
when implementing the debt settlement.
Under Amended and Restated Debt Settlement Agreement, the Company agrees that:
1. firstly, repay and settle US$2,500,000 of the Total Principal Amount
and outstanding interests accruing and unpaid to the Closing Date by
way of cash;
2. assign to the Company's subsidiary, MCRI, US$3,9000,000 of the MCR Loan
so that the total of MCRI Loan becomes US$14,900,000 and the Company
will issue a promissory note to MCRI for its assumption of the
US$3,900,000 MCR Loan;
3. after completion of item (2) and within 15 days after the Closing Date,
MCRI will repay and settle US$14,900,000 of the MCRI Loan by
transferring 20,600,000 common shares (each a "Share") of the Company
that MCRI receives from the Company;
4. after completion of items (1), (2) and (3) and within 45 days after the
Closing Date, Melco will assign to Wisecord Holdings Limited ("WHL")
US$2,100,000 (the "US$2.1m Principal") of the Total Principal Amount in
consideration of WHL transferring 15,000,000 Shares to Melco;
5. after completion of items (1), (2), (3) and (4), the Company will repay
and settle the remaining US$3,500,000 (the "US$3.5m Principal") of the
Total Principal Amount in the following method (the "Asset Transfer
Method"):
i. by way of cash payment arising from any sale proceeds from the
sale of any of the 5 completed and furnished villas situate at the
Club Med Sun Mountain Yabuli Resort (the "Chosen Villas") to be
chosen by Melco beforehand provided that the selling price shall
not be less than US$700,000 per villa;
ii. if the sale proceeds arising from sub-paragraph (i) above are not
sufficient to fully settle the US$3.5m Principal on or before 31
March 2013, Melco will have an option to choose to fully settle
such outstanding of the US$3.5m Principal by way of:- (I) transfer
of up to maximum of 5 Chosen Villas to the Lender on the basis of
US$700,000 per villa; or (II) subject to approval of the Exchange,
by way of conversion of the Shares at a conversion price of
CAD$0.18 per Share. The Company will bear all costs, expenses
(including, without limitation, legal costs and expenses) and
taxation duties arising from such transfer reasonably incurred;
and
iii. Interest on the US$3.5m Principal or any outstanding part thereof
from time to time (as the case may be) shall accrue at the rate of
3%, and shall be payable and satisfied in-one-go on such final
settlement date by way of, at Melco's option, either:- (1) in
cash; or (2) through issuance of the Shares at a conversion price
of CAD$0.18 per Share.
6. Also, for the US$2.1m Principal assigned to WHL, the Company will repay
and settle this US$2.1m Principal with WHL through the Asset Transfer
Method by allowing WHL to choose 3 villas at the Club Med Sun Mountain
Yabuli Resort for the purpose of repayment and settlement.
Completion of the transactions contemplated under the Amended and Restated Debt
Settlement Agreement is subject to, among other conditions, the following
conditions:
1. the Company shall have completed the Non-brokered Private Placement
Offering announced on September 16, 2011;
2. the Company shall have obtained the approval of disinterested
shareholders ("Shareholder Approval") of the transactions contemplated
by the Amended and Restated Debt Settlement Agreement by July 15, 2012
or such other later date(s) to be mutually agreed by the parties in
accordance with the policies of the TSX Venture Exchange (the
"Exchange");
3. the Company shall have received final approval of the Exchange; and
4. the Company shall have opened a bank account and a sum of
CAD$5,000,000, being the fund for the purpose of cash repayment for
item (1) above, shall have been held and maintained in a specified bank
account up to the Closing Date.
The Closing Date of the Amended and Restated Debt Settlement Agreement is
scheduled to be 10 business days after the date that the Company receives the
Shareholder Approval or such other later date(s) as may be mutually agreed by
the parties in writing.
About MCR
MCR is the premier developer of four season destination ski resorts in China.
MCR is transforming existing China ski properties into world-class, four seasons
luxury mountain resorts with excellent real estate investment opportunities for
discerning buyers. In February 2009, the Company's Sun Mountain Yabuli Resort
was awarded Best Resort Makeover in Asia by TIME Magazine. Yabuli is also the
permanent home of the China Entrepreneur's Forum the leading and most
influential community of China's most distinguished and successful entrepreneurs
and business leaders with over 5,000 members from across a variety of key
industries.
ON BEHALF OF THE BOARD
Gang Han, Chief Financial Officer
FORWARD LOOKING INFORMATION
Information in this press release that is not current or historical factual
information may constitute forward-looking information within the meaning of
securities laws, and actual results may vary from the forward-looking
information. Implicit in this information are assumptions regarding future
operations, plans, expectations, anticipations, estimates and intentions, such
as the plans to develop the ski resorts in China. These assumptions, although
considered reasonable by MCR at the time of preparation, may prove to be
incorrect. Readers are cautioned that actual future operating results and
economic performance of MCR are subject to a number of risks and uncertainties,
including MCR's ability to receive shareholder approval for transactions
contemplated in the Amended and Restated Debt Settlement Agreement, MCR's
ability to complete and execute all of the requirements set out in the Amended
and Restated Debt Settlement Agreement, MCR's ability to implement its business
strategies in general, MCR's ability to obtain additional financial resources
and sufficient working capital, currency fluctuations and other risks, and could
differ materially from what is currently expected as set out above.
Forward-looking information contained in this press release is based on current
estimates, expectations and projections, which MCR believes are reasonable as of
the date of this press release. MCR uses forward-looking statements because it
believes such statements provide useful information with respect to the
operation and financial performance of MCR, and cautions readers that the
information may not be appropriate for other purposes. Readers should not place
undue importance on forward-looking information and should not rely upon this
information as of any other date. While MCR may elect to, it does not undertake
to update this information at any particular time except as required by
applicable law.
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