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Gold/Mining/Energy : Kafus Environmental (KS)
KS 34.950.0%Dec 14 4:00 PM EST
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To: Abuckatatime who wrote (168)6/8/1999 9:38:00 AM
From: Abuckatatime  Read Replies (1) of 229
 
Letter to shareholders addressing potential dilution from ECT's conversion. Excerpt from letter:

"...at the annual general meeting shareholders will be asked to ratify a series of financing transactions involving Enron Capital & Trading Resources Corp and its affiliates ("ECT") and to approve for listing on the AMEX Common Shares which may be issued in connection with such financing transactions. We would like to take this opportunity to clarify this proposal. Even though the Company is seeking approval of the AMEX listing of approximately 19,375,000 Common Shares (which represents 1.25 times the estimated issuance of approximately 15,500,000 Common Shares upon the conversion or exercise of convertible obligations held by ECT), the Company is aware of the potential dilution to existing shareholders. Under the terms of most of the convertible obligations, conversion into Common Shares cannot occur until maturity date or unless there is default.

Based upon the information at this time, the Company believes that the majority of the Common Shares to be listed will not be issued to ECT because the Company intends to pay off its obligations to ECT from its operations or refinance such obligations. If the Company pays off its obligations to ECT, the Company will be responsible for the issuance of approximately 3,982,500 Common Shares related to warrants issued to ECT. We believe that in light of the significant financial support given by ECT the warrants are reasonable." (bold by KS)

See May 25 letter:
sedar.com
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