Gold Reserve Completes Partial Redemption of Outstanding Notes (7/18/17)
SPOKANE, Wash.--(BUSINESS WIRE)--Gold Reserve Inc. (TSX.V: GRZ) (OTC: GDRZF) (“Gold Reserve” or the “Company”) is pleased to announce that on July 14, 2017 it completed its previously announced redemption of a portion of its outstanding senior notes which, together with the conversion of senior notes at the election of certain noteholders, has resulted in the Company reducing its outstanding debt by approximately US $28.3 million.
In connection with the partial redemption, the Company redeemed approximately US $21.1 million in aggregate principal amount of its outstanding senior notes, comprising approximately US $16.6 million of its 11% Senior Secured Convertible Notes due 2018 (the “Convertible Notes”) and approximately US $4.5 million of its 11% Senior Secured Interest Notes due 2018 (the “Interest Notes” and together with the Convertible Notes, the “Notes”). In addition, certain noteholders, at their election, have converted approximately US $7.2 million aggregate principal amount of Notes (including $6.6 million aggregate principal amount of Notes converted at the election of certain noteholders in lieu of the redemption of such Notes).
The Notes were redeemed for cash at a redemption price of 120% of the outstanding principal amount of the redeemed notes plus accrued interest to the redemption date. Accordingly, the total redemption price paid by the Company included approximately US $4.0 million related to the redemption premium and accrued and unpaid interest on the Notes. The redemption was made pursuant to the indenture governing the Notes and the terms of the notice of redemption.
Following the redemption and Note conversions described above, the Company has US $25.9 million and US $4.9 million of Convertible Notes and Interest Notes outstanding, respectively, for a combined total of approximately US $30.8 million. The Company issued approximately 2.4 million additional Class A common shares in connection with the conversions described above, resulting in approximately 92.3 million shares outstanding. In the event the remaining outstanding Convertible Notes are converted to Class A common shares, the Company would have approximately 100.9 million shares issued and outstanding.
Gold Reserve intends to apply the proceeds of additional payments received pursuant to its settlement agreement (the “Settlement Agreement”) with the Bolivarian Republic of Venezuela (“Venezuela”), net of applicable taxes, to redeem the remaining outstanding Notes in accordance with the requirements of the indenture, including the proceeds of the installment payment that the Company announced it had received on July 11, 2017.
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