Following the release of details of the rights offering, along with news that Dundee lost money in the last quarter, the shares bounced back to 0.27 and rights to 0.08 before slipping back to 0.25 and 0.07 respectively. Any reason for the rebound? Short covering? Good news in the rights details (see last two paragraphs below)?
"Breakwater Announces Details of Rights Offering
TORONTO, March 28 /CNW/ - ...(TSE..BWR) Breakwater Resources Ltd.
("Breakwater") is pleased to announce that it has received approval from
securities regulators for its rights offering by prospectus (the "Prospectus")
to raise up to $18.9 million for working capital purposes. Breakwater will
issue rights ("Rights") to subscribe for common shares of Breakwater (the
"Common Shares") to its shareholders
of record at the close of business on
April 5, 2002. Each shareholder, other than U.S. residents, will receive one
Right for each Common Share held on the record date. One Right will entitle
the holder to purchase one Common Share at a price of $0.20 until 4:30 p.m.
(Toronto time) on Wednesday May 1, 2002.
If all of the Rights are exercised, Breakwater will issue 94,454,795
Common Shares and receive net proceeds of approximately $17,690,959.
Breakwater expects to mail the certificate representing the Rights and the
Prospectus to its shareholders on or about April 9, 2002. The Prospectus
provides information concerning the Company, the rights offering and
instructions for exercising Rights.
Holders of Rights who fully exercise their Rights are entitled to
subscribe for additional Common Shares at a price equal to the subscription
price ($0.20 per Common Share). The number of Common Shares available under
the additional subscription privilege will be limited to the Common Shares, if
any, not otherwise subscribed for under the basic subscription privilege of
the rights offering. These additional Common Shares will be allotted, as
available, on a pro rata basis to each shareholder exercising this additional
subscription privilege.
The Rights will commence trading on The Toronto Stock Exchange on April
3, 2002 under the symbol BWR.RT, and will cease at 12:00 noon, Toronto time on
May 1, 2002.
Griffiths McBurney & Partners will act as the managing dealer to form a
dealer group to solicit subscriptions for Breakwater Common Shares.
Dundee Bancorp Inc. ("Dundee"), Breakwater's largest shareholder, has
indicated its intention to subscribe for at least one-third of the number of
Common Shares subscribed for in connection with the Rights Offering (to the
extent available, in the case of its subscription for Common Shares which
exceeds the pro rata entitlement of Dundee under the rights offering), up to a
maximum of $5 million.
Breakwater is also pleased to announce that it has completed the
financing previously announced in November, 2001. The banking syndicate has
provided the Company with a supplemental term facility of US$6.5 million,
approximately $10 million Canadian. Dundee has provided the banking syndicate
with a US$6.5 million letter of credit to enable Breakwater to increase its
credit facilities.
Additionally, scheduled payments will no longer be required under the
term facility, the revolving facility is extended until January 2, 2003, which
is also the new maturity date for the term facility, and the requirement to
meet financial convenants has been removed. Interest payments must be kept
current during this period. The revolving facility has been capped at US$37.5
million. Provided that at least $15 million is raised pursuant to the rights
offering the revolving facility will be restored to its original limit of
US$45 million." |
