Persistence Capital Partners Completes Restructuring of Warnex Debentures
Persistence Capital Partners LP (PCP), a leading Canadian private equity firm focused exclusively on investments in high growth opportunities in the healthcare field, announced that it had entered into an agreement to extend the maturity date and modify various other terms of the debentures (the "Debentures") issued by Warnex Inc.
- (1888PressRelease) August 19, 2011 - ("Warnex") (TSX: WNX), a life sciences company devoted to providing laboratory services to the pharmaceutical and healthcare sectors.
Further to this agreement, the Debentures are now convertible, at any time and at the option of the holder, into common shares (the "Common Shares") of Warnex upon the following terms: (i) the principal amount of the Debentures is convertible into Common Shares at the lower of $0.06 per Common Share and the market price of the Common Shares at the time of conversion and (ii) the accrued interest owing pursuant to the Debentures is convertible into Common Shares at the market price of the Common Shares at the time of conversion.
In addition, the agreement extends the maturity date and modifies various other terms of the Debentures as follows:
* the maturity date for all Debentures has been extended to November 8, 2011, with an option in favor of Warnex for a further extension to no later than December 13, 2011, upon the occurrence of certain events and the agreement of the parties;
* accrued interest for the period ending June 30, 2011 will be paid on or before September 30, 2011;
* interest owing pursuant to the Debentures following June 30, 2011, will be accrued and added to the principal amount thereof; and
* the Debentures are secured by a charge on all of the property and assets of Warnex and its subsidiaries.
After giving effect to the transaction, PCP owns $2,000,000 principal amount of Debentures which are convertible, assuming a conversion price of $0.06 per Common Share, into 33,333,333 Common Shares, or approximately 19.82% of the outstanding Common Shares (assuming the conversion of all outstanding Debentures and that all other convertible securities of Warnex are not converted). In addition, PCP owns 12,238,750 Common Shares and 692,042 warrants to acquire Common Shares (the "Warrants"). Assuming exercise of the Warrants and conversion of the Debentures at a conversion price of $0.06 per Common Share, PCP would own 46,264,125 Common Shares, or approximately 27.40% of the outstanding Common Shares (assuming the conversion of all outstanding Debentures and that all other convertible securities of Warnex are not converted).
PCP entered into this transaction to provide Warnex the time and opportunity to restructure its balance sheet. Depending on the evolution of Warnex's business, financial condition, the market for Warnex securities, general economic conditions and other factors, PCP may acquire additional securities of Warnex or sell some or all of the securities it holds, in the open market, by private agreement or otherwise, subject to market conditions and other relevant factors.
This press release is issued pursuant to the early warning report requirements of applicable securities laws of Canada which also requires a report to be filed on SEDAR containing additional information with respect to the foregoing matters. A copy of such early warning report can be found on SEDAR (www.sedar.com).
About Persistence Capital Partners
Persistence Capital Partners is a leading investment firm exclusively focused on high-growth opportunities in the healthcare field. With its deep industry expertise, PCP aims to create significant long term capital appreciation by identifying and developing attractive investment opportunities in the healthcare market, with a focus on healthcare services businesses across a broad spectrum of the healthcare sector.
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