Second trust (PWI.UN did it a couple days ago) to sell some new trust units below the current market price. PWI.UN (was at $8.75) traded down to near the new unit price ($8.35) pretty quickly, so one might think that Enerplus (ERF.G units, current price $24.20) might collapse closer to the new issue price too ($23.10),...bummer!
Perhaps the trusts, with their better industry contacts, see that oil prices could start dropping soon (maybe after the OPEC conference), so now is the time to float new trust units to pay down debt and fund new acquisitions.
To sell, or not to sell?? :-(((
Enerplus to sell 1.5 million trust units
Enerplus Resources Fund ERF.G
Shares issued 39,112,874 Sep 6 close $24.30
Thu 7 Sept 2000 News Release
An anonymous director reports
Enerplus Resources has entered into an agreement to sell, to a syndicate of
underwriters led by CIBC World Markets Inc., 1.5 million trust units at
$23.10 per trust unit to raise gross proceeds of approximately $35-million
on a bought-deal basis. Enerplus has granted the underwriters an option,
exercisable in whole or in part prior to closing, to purchase up to an
additional 225,000 trust units at the same offering price. The issue will
be offered in all provinces of Canada. Closing is expected to occur on
Sept. 29, 2000.
Net proceeds from the issue will be used for general corporate purposes,
including capital expenditures, recent acquisitions and related
indebtedness, and in the interim, to repay outstanding indebtedness. The
securities being offered by Enerplus have not been, nor will be, registered
under the United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or applicable
exemption from the registration requirement of such act. This release does
not constitute an offer for sale of trust units in the United States and
any public offering of trust units in the U.S. will be made by means of a
prospectus.
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