Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- issuer's only outstanding public securities are debentures that cannot convert into shares and ruble denominated bonds -- order that certain continuous disclosure requirements do not apply to issuer, subject to conditions -- relief granted.

Applicable Legislative Provisions

Securities Act (Ontario), s. 86.

National Instrument 51-102 Continuous Disclosure Obligations, Part 9, s. 11.6.

March 21, 2014

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the "Jurisdiction") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF URANIUM ONE INC. (the "Applicant")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Applicant for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that the requirements of National Instrument 51-102 Continuous Disclosure Obligations, Part 9 (Proxy Solicitation and Information Circulars) and section 11.6 (Executive Compensation Disclosure for Certain Reporting Issuers) not apply to the Applicant (the "NI 51-102 Relief").

In addition, the Applicant also seeks relief from the proxy solicitation and information circular requirements set out in section 86 of the Securities Act (Ontario) (the "OSA Relief" and, together with the NI 51-102 Relief, the "Requested Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(i) the Ontario Securities Commission is the principal regulator for this application (the "Principal Regulator"); and

(ii) the Applicant has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in each of the other Provinces and Territories of Canada (together with Ontario, the "Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

1. The Applicant was continued under, and is governed by, the Canada Business Corporations Act (the "CBCA").

2. The Applicant's registered office and head office are located at Suite 1710, Bay Adelaide Centre, 333 Bay Street, Toronto, Ontario, M5H 2R2.

3. The Applicant is a reporting issuer in every province and territory in Canada and is not in default of its obligations under the Legislation.

4. Prior to the Arrangement (as defined below), the Applicant's common shares (the "Common Shares") were listed and posted for trading on the Toronto Stock Exchange ("TSX") and the JSE Limited ("JSE").

5. On March 12, 2010, the Applicant completed a bought deal public offering of C$260 million aggregate principal amount of 5% (re-set from the original rate of 7.5% on October 12, 2010) convertible unsecured subordinated debentures (the "Debentures") maturing on March 13, 2015. The Debentures were issued pursuant to the trust indenture (the "Indenture") made as of March 12, 2010 between the Applicant and Computershare Trust Corporation of Canada. The Debentures are listed for trading on the TSX under the symbol "UUU.DB.A."

6. On December 7, 2011, the Applicant completed an offering in Russia of ruble-denominated bonds having an aggregate principal amount of approximately US$463.5 million at the time of the offering (the "Series 1 Ruble Bonds"). The Series 1 Ruble Bonds were admitted to trading on the Moscow Exchange on December 14, 2011 under the symbol RU000A0JRTS1. On August 26, 2013, the Applicant completed an offering in Russia of a second series of ruble-denominated bonds having an aggregate principal amount of approximately US$378.8 million at the time of the offering (the "Series 2 Ruble Bonds" and together with the Series 1 Ruble Bonds, the "Ruble Bonds"). The Series 2 Bonds are listed for trading on the Moscow Exchange under the symbol RU000A0JRTT9. Concurrently with the offering of the Series 2 Ruble Bonds, the Applicant made a public offer to repurchase, through the facilities of the Moscow Exchange, the Series 1 Bonds. Post-offering there were approximately US$75.6 million principal amount of Series 1 Ruble Bonds outstanding.{1}

7. Neither the Debentures nor the Ruble Bonds constitute voting securities of the Applicant.

8. On October 18, 2013, the Applicant completed a going-private transaction by filing articles of arrangement pursuant to a plan of arrangement the ("Arrangement") whereby Uranium One Holding N.V. (the "Purchaser"), an affiliate of ROSATOM State Atomic Energy Corporation, acquired all of the issued and outstanding Common Shares of the Applicant not already owned by it and its affiliates pursuant to the Arrangement. The Common Shares were delisted from the TSX on October 21, 2013 and the JSE on October 22, 2013 and therefore none of the Common Shares are traded on a marketplace as defined in National Instrument 21-101 Marketplace Operation.

9. As a term of the Arrangement, all of the outstanding options to purchase Common Shares (the "Options") were cancelled in exchange for certain payments made to optionholders.

10. As a result of the Arrangement, all of the Common Shares are currently held by the Purchaser and its affiliates, and there are no Options outstanding.

11. There are no Common Shares (or other voting securities) or rights to acquire Common Shares (or other voting securities) outstanding other than the Common Shares held by the Purchaser and its affiliates.

12. The completion of the Arrangement constitutes a "change of control" under the Indenture. As a result, pursuant to its obligations under the Indenture, on November 15, 2013, the Applicant made an offer to repurchase Debentures at a purchase price equal to 101% of the principal amount thereof plus accrued interest and unpaid interest, by no later than January 1, 2014, and on the other terms and conditions set out in the Indenture (the "Offer"). 87.49% of the outstanding Debentures (equivalent to CA$227,461,000 of the Debentures), were tendered, repurchased and cancelled pursuant to the Offer. The remaining holders of Debentures, (of which CA$32,524,000 in principal amount remains outstanding) are no longer entitled to convert Debentures they hold for Common Shares. Instead, they are entitled to receive a cash payment upon any such attempted conversion.

13. The Applicant continues to be, and continues (except as expressly provided in this decision document) to be subject to the obligations of, a reporting issuer under the Legislation, and continues to be subject to Russian public disclosure obligations as the issuer of the Ruble Bonds.

14. The only securities currently outstanding, other than the Common Shares held by the Purchaser and its affiliates, are the Debentures and the Ruble Bonds.

Decision

The Principal Regulator is satisfied that the decision meets the test set out in the Legislation for the Principal Regulator to make the decision.

The decision of the Principal Regulator under the Legislation is that Requested Relief is granted for so long as there are no Common Shares (or other voting securities) or rights to acquire Common Shares (or other voting securities) outstanding other than the Common Shares held by the Purchaser and its affiliates.

As to the NI 51-102 Relief:

"Sonny Randhawa"
Manager, Corporate Finance Branch
Ontario Securities Commission

As to the OSA Relief:

"Deborah Leckman"
Commissioner
Ontario Securities Commission
 
"Sarah Kavanagh"
Commissioner
Ontario Securities Commission

{1} Based on exchange rates in February, 2014.