Coalcorp Announces Agreement for the Prepayment of the Debenture Issued by Formation Metals Inc.
Coalcorp Mining Inc. announces that it has entered into an agreement with Formation Metals Inc. for the prepayment by Formation of the 12% unsecured convertible debenture in the principal amount of $8 million issued by Formation to Coalcorp on May 6, 2010 (the “Debenture”). Currently, the principle amount outstanding on the debenture is $7 million, and Coalcorp holds 795,638 of Formation common shares. Pursuant to this agreement, Coalcorp will surrender the Debenture to Formation upon receipt of approximately $9.33 million in cash and 400,000 common shares in the capital of Formation (“Formation Shares”). The prepayment and surrender of the Debenture is subject to certain conditions, including the completion of Formation’s previously announced public offering of Formation Shares by Formation and regulatory approval. The closing of the transaction is expected to occur on or about March 15, 2011.
