Invesque Inc. Announces Proposed Enhancements to the Terms of its 6.00% 2018 Convertible Debentures Due September 30, 2023
Toronto, Ontario, April 10, 2023 – Invesque Inc. (the “Corporation” or “Invesque”) (TSX: IVQ and IVQ.U) announced today that it will seek the approval of holders of its 6.00% 2018 Convertible Debentures due September 30, 2023 (TSX:IVQ.DB.V) (the “Debentures”) to enhance the terms of the Debentures at a meeting of the holders of the Debentures (the “Debentureholders”) to be held on May 23, 2023 (the “Meeting”).
The proposed amendments (the “Debenture Amendments”) to the Debentures (as amended by the Debenture Amendments, the “Amended Debentures”), if approved by the Debentureholders, will result in:
- INCREASING the underlying interest rate from 6.00% to 8.75%, effective September 30, 2023;
- DECREASING the conversion price from US$10.70 to US$2.75 per share of Invesque;
- EXTENDING the maturity date from September 30, 2023 to September 30, 2026; and
- REDEEMING, on a pro rata basis, US$22,000,000 (representing approximately 46%) of the principal amount of the Amended Debentures outstanding, plus accrued and unpaid interest thereon to, but excluding, the date of the redemption (the “Partial Redemption”), which will occur on September 30, 2023.
All remaining Amended Debentures will (if not redeemed or converted) be repaid by Invesque at the extended maturity date of September 30, 2026 pursuant to the terms of the indenture governing the Amended Debentures.
If the Debenture Amendments are approved by the Debentureholders, the effective date of the Debenture Amendments (other than the increase to the interest rate) will be on the date that Invesque enters into a supplemental trust indenture embodying such amendments.
“We have successfully executed on a number of strategic dispositions over the last 24 months, reducing the Corporation’s leverage and making noteworthy improvements to our financial position,” commented Chairman & Chief Executive Officer, Scott White. “Our seniors housing operating partners continue to see positive move-in trends, higher than historical rate growth, and a slowing of expense pressures, which we expect to result in further improvements to overall financial results in 2023 and beyond. The proposed Debenture Amendments will allow us to continue executing on our strategy, which we believe will create significant value for all stakeholders. Additionally, the extension would provide Debentureholders with a longer period of time to achieve an attractive yield.”
The Board of Directors of Invesque (the “Board”) believe that the Debenture Amendments provide a number of benefits to Invesque and its securityholders, including to the Debentureholders.
The Board UNANIMOUSLY RECOMMENDS that the Debentureholders vote FOR the Debenture Amendments.
Debentureholders holding approximately 36% of the outstanding Debentures have either signed voting support agreements or provided written undertakings to vote the Debentures beneficially owned or controlled by them FOR the Debenture Amendments.
Details about the Debenture Amendments
The record date for determining the Debentureholders entitled to receive notice of and vote at the Meeting is April 11, 2023. Further information with respect to the Debenture Amendments will be outlined in the management information circular of Invesque (the “Circular”) to be sent to Debentureholders in connection with the Meeting. For the Debenture Amendments to be approved, at least 662/3% of the principal amount of the Debentures voted (either in person at the Meeting or by proxy) must be voted in favour of the Debenture Amendments. Alternatively, the Debenture Amendments will be approved without the need for a Meeting if the form of proxy or voting instruction form accompanying the Circular is executed in writing by holders of not less than 66⅔% of the principal amount of the Debentures who mark the FOR box prior to the Meeting.
Detailed voting instructions will be found in the Circular and accompanying proxy form or voting instruction form. The Meeting is scheduled to be held on May 23, 2023 at 10:00 a.m. (Eastern Time) at the offices of the Corporation at 8701 E. 116th Street, Suite 260, Fishers, Indiana.
The Debenture Amendments are subject to the approval of the Toronto Stock Exchange (the “TSX”).
Invesque is a North American health care real estate company with an investment thesis focused on the premise that an aging demographic in North America will continue to utilize health care services in growing proportion to the overall economy. Invesque currently capitalizes on this opportunity by investing in a portfolio of income-generating predominantly private pay seniors housing communities. Invesque’s portfolio includes investments primarily in independent living, assisted living, and memory care, which are operated under long-term leases and joint venture arrangements with industry-leading operating partners. Invesque’s portfolio also includes investments in owner-occupied seniors housing properties in which Invesque owns the real estate, the licensed operations, and provides management services through Commonwealth Senior Living, LLC, a Delaware limited liability company. For more information, please visit www.invesque.com.
Certain statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management’s current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These forward-looking statements include statements regarding: the Meeting date, the proposed Debenture Amendments, the anticipated Partial Redemption and the anticipated performance of the Corporation in 2023 and beyond. In some cases forward-looking information can be identified by such terms as “will”, “would”, “anticipate”, “anticipated”, “expect” and “expected”. The forward-looking statements in this news release are based on certain assumptions, including assumptions regarding the Corporation’s ability to complete the Partial Redemption and that existing trends being observed by the Corporation’s seniors housing operating partners will continue. Such statements are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Such risks include the risk that the Debenture Amendments will not be approved by either Debentureholders or the TSX, that the Partial Redemption will not occur as planned and that existing trends being observed by the Corporation’s seniors housing operating partners will not continue, as well as those risks described in the Corporation’s current annual information form and management’s discussion and analysis, available on SEDAR at www.sedar.com, which risks may be dependent on market factors and not entirely within the Corporation’s control. Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. These forward-looking statements reflect current expectations of the Corporation as at the date of this news release and speak only as at the date of this news release. The Corporation does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
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