OmniArch Capital Corporation Debt Restructure

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CALGARY, AB--(Marketwired - July 18, 2016) - OmniArch Capital Corporation ("OmniArch" or the "Company") announced today that the Company and certain of its affiliates, namely OmniArch Management Corporation, OmniArch Fixed Income Limited Partnership, OmniArch Fixed Income G.P. Ltd. and American RMBS Equity Fund IV L.P. have obtained court protection under the Companies' Creditors Arrangement Act ("CCAA") pursuant to an initial order granted by the Court of Queen's Bench, in the Province of Alberta, on July 15, 2016 (the "Initial Order"). The Initial Order relates solely to the Company and affiliates which are related to the Company's previous offerings of fixed income bonds. Pursuant to the Initial Order, the Company and the above named affiliates have obtained protection from creditors under the CCAA for a period expiring August 12, 2016, as the Company attempts to restructure and reorganize its current fixed debt obligations, subject to possible extension from time to time pursuant to further court order.
After careful consideration of all available alternatives, the Board of Directors of the Company determined it was in the best interests of all of its stakeholders to seek the creditor protection granted in the Initial Order. Recently, the Company has been experiencing cash flow challenges relating to its fixed payment obligations to existing bondholders as a result of a continual low interest rate environment in the USA and general market conditions in addition to the illiquidity of, and corresponding returns being generated on the Company's portfolio of investment securities. The Initial Order has been obtained in order to allow the Company to design and file a plan of arrangement with the Court which will provide for the restructuring of the terms of the Company's existing bonds (the "Plan") in a manner that the Company believes will be in the best interests of all bondholders.
While under CCAA protection, management of the Company will remain responsible for the day-to-day operations of the Company. Ernst & Young Inc. has been appointed Monitor of the Company for the CCAA proceedings. The Monitor will monitor the affairs of the Company in accordance with the CCAA and the provisions of the Initial Order. At this time, there are no intended changes to the management team or the composition of the Board of Directors of the Company which were in place at the time of granting of the Initial Order and the Company anticipates that such individuals will continue in their respective roles throughout the CCAA process.
7 D, d$ J0 `; y3 @To enable the Company to maintain normal business operations and complete a plan of compromise or arrangement with its bondholders, the Initial Order provides a stay of certain creditor claims, including those of the Company's bondholders, and the exercise of contractual rights arising out of the CCAA process.
9 ~1 \, Y+ M8 }3 C. {8 T+ i6 ^A copy of the Initial Order will be made available and details relating to this case may be accessed on the Monitor's website at www.ey.com/ca/omniarch. The Monitor has also established the following information hotline related to enquiries regarding the CCAA process, at (403) 206-5153.
The Court has additionally approved the appointment of Miles Davison LLP ("Bondholder Representative Counsel") as representative legal counsel in the CCAA proceedings to represent the interests of the bondholders of the Company, unless a particular bondholder provides written notice to the Bondholder Representative Counsel and the Monitor that it does not wish to be so represented. Bondholders may contact Terry Czechowskyj at Bondholder Representative Counsel at (403) 298-0307 for any inquiries that they may have relating to the CCAA process or the Initial Order. Bondholders will be contacted in order to advise them of the next steps required in order to appoint a creditor committee to represent their interests in the CCAA proceedings.
8 a1 F1 s1 |' @9 R% WDuring the period of creditor protection granted in the Initial Order the Company intends to structure and file the Plan to allow for the restructuring of the terms of existing bonds in a manner the Company believes will treat all bondholders equitably and maximize the return realizable collectively by the bondholders. The Company's bondholders will be entitled to vote in respect of such Plan at a meeting of bondholders (the "Meeting") and the Plan must be approved by a requisite number and principal amount of bondholders in order to be effective.
Further news releases will be provided on an ongoing basis throughout the CCAA process to provide further details in respect of the Plan and the Meeting and as may be determined necessary.
6 c) ^/ b3 N, ]- uForward Looking Statements
. Z5 i/ o7 o* D0 q: w* ~This news release contains certain statements that constitute forward-looking statements under applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These statements are only as of the date of this document and the Company does not undertake to publicly update these forward-looking statements except in accordance with applicable securities laws. Forward-looking statements, including but without limitation, statements concerning the implementation of CCAA proceedings and the reorganization or restructuring of the bonds, assets, business and financial affairs of the Company are based on current expectations, estimates, projections and assumptions, which the Company believes are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. These forward-looking statements involve known and unknown risks, uncertainties which may cause actual results or performance to be materially different from any future results or performance expressed or implied herein. These risks, uncertainties and other factors relating to the Company include, but are not limited to, the level of indebtedness of the Company, the implementation and impact of obtaining any reorganization or restructuring of the bonds, assets, business and financial affairs of the Company, future co-operation of the creditors (including bondholders) of the Company as well as other general assumptions regarding, among other things: U.S. residential mortgage rates; the general stability of the economic and political environment; the effect of current plans; the timing and costs of expenditures and currency, exchange and interest rates.
% d8 B. T. q# W2 q3 B: MAny forward looking information included in this press release is expressly qualified in its entirety by this cautionary statement. Any forward looking information included herein is made as of the date of this press release and the Company assumes no obligation to update or revise any forward looking information to reflect new events or circumstances, except as required by law.