FORT ST. JOHN, BRITISH COLUMBIA--(Marketwire - March 28, 2012) - Macro Enterprises Inc. (TSX VENTURE:MCR.V - News) (the "Company" or "Macro") announces that it has entered into an agreement dated effective December 31, 2011 to amend the convertible loan agreement dated July 7, 2006, as amended, among Macro, its wholly-owned subsidiary, Macro Industries Inc., and Frank Miles, Mark Dodge, Hugh Sewell (together, the "Original Lenders") and an assignee of an Original Lender. The amendments are subject to the acceptance of the TSX Venture Exchange (the "Exchange") and approval by the Company's disinterested Common shareholders.
The loan agreement will be amended to, among other things: (i) extend the maturity date of the loan to January 1, 2014; (ii) revise the terms relating to payment of interest to provide that interest accruing after December 31, 2011 will be payable in cash at a rate of 6.5% per annum, or, if the Company's bank (or other bank providing an operating line to the Company) does not permit the payment of such interest in cash, the interest will be added to the principal amount of the loan and will be paid as such; (iii) extend the date on which repayment of the principal amount of the loan will commence to January 1, 2013 (at the rate of $127,332.60 per month for a period of 12 months with a final payment of $6,161,060.14 due on the maturity date); and (iv) provide that the Company may, at its option and upon obtaining the prior consent of the Company's bank, make a one-time payment to the lenders in the amount of $2 million at any time before the maturity date of the loan.
Making the amendment is beneficial to the Company as the maturity date has been extended for one year and the date on which principal repayments must commence has been deferred for 15 months. This allows the Company to conserve cash. Additionally, the Original Lenders no longer have the right to elect to convert interest owing into Common shares of the Company.
Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, the amendments constitute a "related party transaction". Each of the Original Lenders is a "related party" because each is a director and/or senior officer of the Company or a subsidiary, and, in the case of Frank Miles, because he is also a control person and owns or controls, directly or indirectly, securities of the Company carrying more than 10% of the voting rights attached to all of the Company's outstanding securities. Accordingly, the Company is required to obtain "minority approval" of the amendments from the holders of the Common shares of the Company.
The Company is relying on the exemption set forth in section 5.5(b) (Issuer Not Listed on Specified Markets) of MI 61-101, which allows an issuer to forego a formal valuation in respect of a related party transaction if no securities of such issuer are listed or quoted on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc. This exemption is available to the Company as it is listed on the Exchange only.
Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern B.C. and northwestern Alberta. The Company's corporate office is in Calgary, Alberta. Its shares are listed on the Exchange under the symbol MCR. Information on the Company's principal operating unit, Macro Industries Inc., can be found at www.macroindustries.ca.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.