Calgary, Alberta, July 3, 2007 — Brookfield Bridge Lending Fund Inc. (the “Fund”) announced that, in connection with the closing of the public offering (the "Offering") of common shares and 8.5% convertible debentures of Milagro Energy Inc. ("Milagro") the Fund will own, directly or indirectly, or exercise control or direction over, an aggregate principal amount of $5,961,000 principal amount of 8.5% series A convertible senior secured debentures ("Series A Debenture") acquired at a price of $1,000 per Series A Debenture and $1,539,000 principal amount of 8.5% series B convertible senior secured debentures ("Series B Debentures") acquired at a price of $1,000 per Series B Debenture.
The Series A Debentures are convertible into 39,872,909 common shares of Milagro ("Milagro Shares") at a price of $0.1495 per Milagro Share. The Series B Debentures are convertible into 10,294,314 Milagro Shares at a price of $0.1495 per Milagro Share. The Series A Debentures and the Series B Debentures are collectively referred to herein as the "Debentures". The Debentures will mature on May 15, 2009 (the "Maturity Date"). The Debentures will bear interest at an annual rate of 8.5% payable semi-annually on June 30 and December 31 in each year commencing June 30, 2007. The Debentures are redeemable by Milagro at a price of $1,100 per Debenture on or after the date that is 121 days after May 15, 2007 (the "Closing Date") and before the first anniversary of the Closing Date and at a price of $1,150 per Debenture on or after the first anniversary of the Closing Date and before the Maturity Date in each case, plus accrued and unpaid interest thereon.
A holder of Debentures shall not be entitled to exercise the right to convert such amount of Debentures that, if exercised, together with all existing voting securities then held by such holder and any of its affiliates, would result in such holder holding 20% or more of the then issued and outstanding voting securities of Milagro, provided that:
- the foregoing shall not apply if Milagro has obtained Milagro disinterested shareholder approval (the “20% Conversion Approval”) in accordance with the policies of the Toronto Stock Exchange to permit such exercise; or
- in the event of a take-over bid (as defined in the Securities Act (Alberta)), arrangement, business combination, merger, amalgamation or any other transaction involving the acquisition of Milagro Shares and/or securities convertible into, exercisable for or carrying the right to purchase Milagro Shares ("Convertible Securities"), as a result of which a person, group of persons or persons acting jointly or in concert, or persons associated or affiliated within the meaning of the Business Corporations Act (Alberta) with any such person, group of persons or any of such persons (collectively "Acquirors"), such that, assuming acquisition of the shares and/or conversion or exercise of Convertible Securities beneficially owned by the Acquirors, the Acquirors would beneficially own shares which would entitle them to cast more than 50% of the votes attaching to all shares in the capital of Milagro (collectively, the "Approved Transaction"), the holders shall have the right to convert all of the Debentures for tender pursuant to such Approved Transaction.
In addition, conversion of the Series B Debentures is subject to the approval of the shareholders of Milagro (the “Shareholders”) for the issuance of the Milagro Shares upon such conversion at the annual general meeting ("Meeting") of the Shareholders (the "Series B Approval"). The Series B Debentures will be converted automatically into interests in a new secured loan facility and will not be convertible into Milagro Shares in the event the Series B Approval is not obtained at the Meeting or September 30, 2007, whichever comes first.
The Meeting was held on June 26, 2007; and both the 20% Conversion Approval and the Series B Approval have been obtained.
Assuming all of the Series A Debentures are converted and no Series B Debentures are converted, the Fund would acquire 39,872,909 Milagro Shares representing approximately 19.9% of the then issued and outstanding Milagro Shares on the date of issuance of the Series A Debentures. In addition, if the Series B Debentures are converted and no Series A Debentures are converted, the Fund would acquire an additional 10,294,314 Milagro Shares representing 6% of the then issued and outstanding Milagro Shares on the date of the issuance of the Series B Debentures. Assuming conversion of the Series B Debentures.
The Debentures are not being distributed for cash, but are being issued to the Fund for the purposes of partial repayment of a credit facility extended to Milagro by the Fund, which is being restructured concurrently with the completion of the Offering. The Fund may in the future take such actions in respect of its holdings as it may deem appropriate in light of the circumstances then existing, including the purchase of additional securities of Milagro through open market purchases or privately negotiated transactions, or the sale of all or a portion of its holdings in the open market or in privately negotiated transactions to one or more purchasers.
About Brookfield Bridge Lending Inc.
Brookfield Bridge Lending Fund Inc. is dedicated to financing corporations and real estate portfolios in Canada and the U.S., offering tailored solutions to companies in need of interim capital. Through co-investment with our institutional investors, we are able to execute individual transactions of up to $1 billion without syndication conditions or market flex. The Fund is managed by Brookfield Asset Management Inc.
Contact
For additional information, or for a copy of the early warning report filed in respect of the above transaction, please contact:
Jim Reid
Brookfield Bridge Lending Fund Inc..
Suite 1700, 335-8th Avenue SW, Calgary, Alberta, T2P 1C9
Tel: 403-770-7215
Email: jreid@brookfield.com
NOTE: This statements in this press release concerning our future intentions regarding the Fund’s investment in Milagro Energy Inc. convertible debentures may contain forward-looking information and other “forward-looking statements”, within the meaning of certain securities laws including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. We may make such statements in this release, in other filings with Canadian regulators or the SEC or in other communications. The reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors.
When relying on our forward looking statements to make decisions with respect to Brookfield Asset Management Inc., investors and others should carefully consider the risks and factors detailed from time to time in the company’s form 40-F filed with the Securities and Exchange Commission as well as other documents filed by the company with the securities regulators in Canada and the United States including in the Annual Information Form under the heading “Business Environment and Risks” and other uncertainties and potential events. The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.
