I don't believe that is correct but I certainly could be wrong. I believe they are two separtate issues. The first one has to do with capital reduction to make the company "solvent" and appears to be more of a paper move. I am not clear as to how this will affect shareholders. The second is the merger.

This is taken directly from the MIC

The realizable value of Century’s assets is less than the aggregate of its liabilities and stated capital of all classes, and on this basis, it is “insolvent” for the purposes of section 192(2)(b) of the CBCA. Section 38(1) of the CBCA permits a corporation to reduce its stated capital for any purpose, including for the purpose of declaring its stated capital to be reduced by an amount that is not represented by realizable assets. As the Arrangement cannot be completed if Century is insolvent for the purposes of section 192(2) of the CBCA, Century is proposing to reduce the stated capital of the Century Common Shares pursuant to section 38(1) of the CBCA, in order that, upon such reduction, the realizable value of Century’s assets will not be less than the aggregate of its liabilities and stated capital of all classes (the “Stated Capital Reduction”). The amount by which Century is proposing to reduce the stated capital of the Century Common Shares is $85,000,000 (or such other amount as the directors of Century determine at the relevant time is required so that the realizable value of Century’s assets is not less than the aggregate of its liabilities and stated capital of all classes) (the “Reduction Amount”), and to effect such reduction by reducing the stated capital account of the Century Common Shares by the Reduction Amount (and, as a consequence, reducing the paid-up capital in respect of the Century Common Shares for the purposes of the Tax Act) and reducing Century’s deficit by an amount equal to the Reduction Amount.
The Stated Capital Reduction should not give rise to any immediate adverse tax consequences to Shareholders. See “Certain Canadian Federal Income Tax Considerations”.
Required Shareholder Approval
At the Century Meeting, Century Shareholders will be asked to vote to approve the Stated Capital Reduction Resolution. To be effective, the Stated Capital Reduction Resolution must be approved, with or without variation, by 66-2/3% of the votes cast on the Stated Capital Reduction Resolution by Century Shareholders present in person or by proxy and entitled to vote on such resolution at the Century Meeting. It is intended that if the Stated Capital Reduction Resolution is passed at the Century Meeting, then Century will reduce the stated capital of the Century Common Shares subsequent to the Century Meeting but before the hearing in respect of the Final Order, or any adjournment thereof. The reduction of the stated capital of the Century Common Shares will ensure that Century meets the statutory solvency test in section 192(2) of the CBCA in anticipation of the Arrangement. A copy of the Stated Capital Reduction Resolution is attached as Annex “A” to this Circular.
If the Arrangement Resolution is not approved, the Board at its sole discretion may decide not to proceed with the Stated Capital Reduction.