Argus Corportion Limited: Status Update Report.TORONTO -- Argus Corporation Argus Corporation, based in Toronto, Ontario, is an investment and holding company founded in 1945 by its President E. P. Taylor with minority partners Colonel W. Eric Phillips and Wallace McCutcheon and other investors. Limited ("Argus") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AR.PR.A) (TSX:AR.PR.D) (TSX:AR.PR.B) today provided a status update of developments since its last Status Update Report was filed on October 18, 2004. Argus is providing updates on its affairs on at least a bi-weekly basis. These reports are being made in accordance with certain guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. of the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. (the "OSC O.S.C. n. short for Order to Show Cause. (See: Order to Show Cause) ") until Argus is able to meet its public filing obligations. These guidelines are pursuant to the Management and Insider Cease Trade Order that was issued by the OSC on June 3, 2004 (the "Order") with respect to the management and insiders of Argus. Argus' Status Update Reports that have been filed since the Order are available to review at www.sedar.com. This Report includes certain updates regarding Hollinger Inc. ("Hollinger") of which Argus owns 61.8% of the Retractable re·tract v. re·tract·ed, re·tract·ing, re·tracts v.tr. 1. To take back; disavow: refused to retract the statement. 2. Common Shares ("Common Shares") and Hollinger International Inc. ("International") of which Hollinger owns 68% of the voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. and 18.2% of the equity. The Report further provides an update as to the preparation and filing of financial statements and other related matters by Argus. Argus is required to file financial statements prepared on the basis of consolidation with those of Hollinger for fiscal periods beginning in 2004. It has not been able to date to file such financial statements and each related Management Discussion and Analysis ("MD&A") for these periods as Hollinger has not filed its audited financial statements for 2003 and its unaudited statements unaudited statement A financial statement prepared by an auditor but not in accordance with generally accepted auditing standards. Unaudited statements are prepared to less rigorous standards than audited statements. Compare audited statement. for the fiscal Quarters in 2004. Argus has previously released financial statements that are not consolidated with those of Hollinger for the first two Quarters of 2004. These have been released on the basis of alternative financial reporting. Argus similarly plans to release financial statements for the third fiscal Quarter of 2004 ended September 30, 2004. It has previously announced that it will not be able to file its financial statements as consolidated with those of Hollinger and related MD&A for that Quarter when they are due by November 14, 2004. Hollinger, in turn, has been unable to file its audited financial statements for 2003 and subsequent quarters in 2004 as International has not prepared its 2003 audited statements. International advised on October 15, 2004 that it expects to be able to complete its audited financial statements (and related MD&A) for its fiscal year ended December 31, 2003 within several weeks from that announcement and to complete its interim financial statements for the fiscal Quarters ended March 31 and June 30, 2004 shortly thereafter. It announced that appropriate filings will then be made on Forms 10-K, 10-Q and 8-K with the U.S. Securities and Exchange Commission (the "SEC") and in Canada. International had previously announced that it was reviewing the Report of its Special Committee that was issued on August 30, 2004 (the "Report") before commencing to prepare those financial statements. Hollinger's ability to prepare its 2003 financial statements as consolidated with those of International and for the Quarters in 2004 is dependent on a level of cooperation from International and its auditors. In this regard, Hollinger and International have agreed to negotiate in good faith a Cooperation and Confidentiality Agreement. Once Hollinger has prepared its financial statements for the Quarters in 2004, Argus would, in turn, then be able to consolidate its financial statements with those of Hollinger and bring its financial reporting up to date. Argus is however unable to determine when that may be commenced or completed owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de various uncertainties. Financial Position of Argus Argus had Cdn. $558,950 of cash as of the close of business on October 28, 2004. Of this amount, Cdn. $251,703 has been allocated to pay regular quarterly dividends on its Class A and Class B Preference Shares on November 1, 2004. These dividends are to be paid to the holders of record of its Class A and Class B Preference Shares at the close of business on October 18, 2004. The dividends to be paid are respectively 62 1/2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. on the Class A Preference Shares $2.50 Series, 65 cents per share on the Class A Preference Shares $2.60 Series and 67 1/2 cents per share on the Class B Preference Shares 1962 Series. The Canada Business Corporations Act The Canada Business Corporations Act, also known as Bill C-44, is a Canadian act respecting Canadian business corporations. See also
It is contemplated that Argus will need to obtain additional funds in order to continue to pay dividends on the Class A and Class B Preference Shares on an uninterrupted basis, including those that are due to be paid on February 1, 2005. Argus intends to make efforts to ensure such payments. Argus indirectly owns 21,596,387 Retractable Common Shares of Hollinger (each a "Share") with a market value at the close of trading on October 28, 2004 on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. of Cdn. $4.31 per share or Cdn. $93,080,428. The amount of its shareholdings is subject to the minority interest of The Ravelston Corporation Limited Ravelston Corporation Limited is a Canadian holding company that was largely controlled by Conrad Black and business partner David Radler. It held shares in Black's other holding companies, such as Hollinger International, now known as Sun-Times Media Group. ("Ravelston"), the parent of Argus. 11,862,342 of the Shares, being approximately fifty-five percent of the Shares, are owned by a subsidiary of Argus in which Ravelston has a significant minority interest. That minority interest was valued at approximately Cdn. $14.8 million at October 28, 2004 based on the market value of the Shares at that date. The financial statements of Argus have further set out a liability for an amount on account of future income taxes on unrealized net capital gains. The estimated amount on account of such future income taxes, as reported in the alternative financial information of Argus for June 30, 2004, was Cdn. $12,069,339. Proposed Hollinger Privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned On October 28, 2004, Hollinger announced a proposal by Ravelston for a going private transaction involving Hollinger. The proposed transaction would be structured as a share consolidation and retirement of its shares held by parties other than by Argus and Ravelston directly and indirectly. The consideration to be paid to shareholders has not yet been determined and, once proposed by Ravelston, is to be reviewed by a committee of independent directors of Hollinger which will retain independent legal and financial advisors to assist it in that review. Hollinger further announced that it had received consents from the holders of a majority in aggregate principal amount of each of its Senior Secured Notes and Second Priority Secured Notes permitting it to incur additional indebtedness and to retire its shares subject to certain conditions. Hollinger announced that it had received binding commitments to issue up to US $40 million in aggregate principal amount of Second Priority Notes and to borrow up to Cdn. $16 million to be secured by non-core real estate assets. These amounts would be utilized to pay for the retraction In the law of Defamation, a formal recanting of the libelous or slanderous material. Retraction is not a defense to defamation, but under certain circumstances, it is admissible in Mitigation of Damages. Cross-references Libel and Slander. of, or payment for, its shares. The retraction price of its Common Shares has been Cdn. $7.25 since August 19, 2004 though such retractions have been suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. . Hollinger announced on October 28, 2004 that it would begin honouring retractions of its Series II Preference Shares ("Series II Shares"). Retractions of the Common Shares will be permitted if and when Hollinger's liquidity position permits. The proposed share consolidations are to be submitted to special meetings of holders of the two classes of shares and, if approved as required, the Articles of Hollinger would be amended to effect the proposed share consolidations that are approved. Should the consolidation of the Series II Shares not be approved by the holders of those shares, the consolidation of the Common Shares would nonetheless proceed if approved. The Common Shares, and the Series II Shares if their consolidation is approved, would then be delisted from the Toronto Stock Exchange. Hollinger would then apply to cease to be a reporting issuer in Canada and would revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to being a private company. Ravelston has agreed to pay substantially all of the fees and expenses with respect to the amendments to the Senior Secured Notes and Second Priority Notes and obtaining the commitments for the US $40 million of additional Second Priority Notes if the consolidation of the Common Shares is not approved. Hollinger's Financial Position Hollinger announced on October 18, 2004 that it and its subsidiaries had approximately US $14.72 million of cash or cash equivalents on October 15, 2004. Hollinger has previously reported that it has approximately US $10.5 million of cash deposited as collateral for its borrowings and that it is entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to apply this amount towards future interest payments on its Senior Secured Notes. Hollinger directly or indirectly owns 792,560 shares of Class A Common Stock and 14,990,000 shares of Class B Common Stock of International. Based on the closing price of the shares of Class A Common Stock of International on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. at the close of business on October 28, 2004 of US $17.96, the market value of Hollinger's direct and indirect holdings in International is US $283,454,778. All of Hollinger's interest in the shares of Class A Common Stock of International is being held in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. with a licensed trust company in support of future retractions of its Series II Preference Shares. All of Hollinger's interest in the shares of Class B Common Stock of International is pledged as security in connection with US $78 million of Senior Secured Notes and US $15 million of Second Priority Notes issued by it. Hollinger to Share in Net Telegraph Proceeds International continues to hold a large amount of cash estimated at US $700 million following its sale of its United Kingdom newspaper properties on July 30, 2004. On October 15, 2004, International reported that its Corporate Review Committee intends to make a final determination as to the distribution of net sale proceeds (after the payment of certain of International's outstanding indebtedness and taxes) (the "Net Proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). ") to International's stockholders. International reported that such distribution could take the form of a self tender offer or a special dividend. International further reported that it expects that action on this matter will be taken shortly after its financial statements are filed with the SEC. International and Hollinger have agreed that Hollinger is to receive a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. portion of the Net Proceeds to be distributed based on the number of shares it holds of International or, in the case of a self tender, equal in proportion to the number of shares tendered. Hollinger in turn has agreed that the injunction granted by Vice-Chancellor Strine in Delaware limiting Hollinger's control of International is to be extended beyond its October 31, 2004 expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. to no later than January 31, 2005. The injunction is to expire on the earlier of the date the Net Proceeds have been distributed to International's shareholders and January 31, 2005. International has further agreed not to block any payment to Hollinger unless that is required by a court order, statute or regulation. There is to be no reduction or set-off. The board of directors of International has the final decision-making authority concerning the distribution of the Net Proceeds. For additional information on developments respecting Hollinger, including a more-detailed review of the terms of the proposed share consolidation and privatization, reference can be made to its public filings online at www.hollingerinc.com, www.hollinger.com or www.sedar.com. Other Hollinger Developments On October 27, 2004, Mr. Justice Colin Campbell There have been several notable people named Colin Campbell: in Scottish history:
E&Y is to conduct an investigation of certain of the affairs of Hollinger. It is to provide a preliminary report to the Court within 30 days from the date of its appointment. E&Y was appointed as an inspector as a result of the Application of Catalyst Fund General Partner I Inc. ("Catalyst"). Catalyst holds over 80% of the Series II Shares. Catalyst's President valued those shares at September 27, 2004 as representing an investment of approximately Cdn. $15.4 million. Catalyst has brought a further Application in the Ontario Superior Court of Justice seeking to remove all of the directors of Hollinger but for two directors who were appointed on September 27, 2004. Catalyst is further seeking an injunction restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. any non-arm's length transactions involving Hollinger without notice to and approval of the Court. That Application is to be heard on November 2, 2004. Hollinger has given certain undertakings not to enter into related party transactions (as defined) without providing two business days' prior notice to counsel for Catalyst. International Developments On October 8, 2004, the Honorable Blanche M. Manning dismissed an US $1.25 billion legal action brought by International in the U.S. District Court of Northern Illinois For the university, see Northern Illinois University Northern Illinois is a region generally covering the northern third of the U.S. state of Illinois. Economics (the "Court") against Hollinger, Ravelston, certain of their directors and officers, and others (the "Amended Complaint amended complaint n. what results when the party suing (plaintiff or petitioner) changes the complaint he/she has filed. It must be in writing, and can be done before the complaint is served on any defendant, by agreement between the parties (usually their lawyers), "). On October 14, 2004, Judge Manning granted International permission to file a second amended Complaint in the Court (the "Second Amended Complaint") by October 29, 2004. International has stated that the Second Amended Complaint is to contain additional allegations of wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do that are described in the Report. The defendants are to be given until December 13, 2004 to respond to the Second Amended Complaint though the Second Amended Complaint has not yet been served on them. International has announced on October 14, 2004 that it intends to appeal the dismissal on October 8, 2004 of its claims under the Racketeer Influenced Corrupt Organizations Racketeer Influenced Corrupt Organization (RICO) statute n. a federal law which makes it a crime for organized criminal conspiracies to operate legitimate businesses. Act in the Amended Complaint either on an interlocutory Provisional; interim; temporary; not final; that which intervenes between the beginning and the end of a lawsuit or proceeding to either decide a particular point or matter that is not the final issue of the entire controversy or prevent irreparable harm during the pendency of the basis if allowed by the Court or upon judgment in the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . For additional information on developments respecting International, reference can be made to its online public filings at either www.hollingerinternational.com or http://www.sec.gov/edgar.shtml. There has been no other material change from the information contained in the Status Update Report of Argus issued on October 18, 2004. |
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