Aurcana (AUN-V) proposes 1-for-8 share consolidation
Feb 13, 2013 - News Release
Aurcana Corp. is proposing a consolidation of its issued and outstanding common shares on the basis of one postconsolidation common share for every eight preconsolidation common shares.
"After carefully considering Aurcana's growth and strategic objectives, we believe that a consolidation could provide significant benefits to the company and its shareholders. This change may open the door to a large base of potential new investors and will qualify the company for a possible dual listing on a U.S. or other major stock exchange. This is an important step in Aurcana's strategic efforts to become a senior silver producer," said Lenic Rodriguez, president and chief executive officer.
Rationale
A share consolidation of the company's issued and outstanding common shares is in line with Aurcana's strategic and growth objectives to become a major senior silver producer.
This action has no impact on the company's value or future cash flows.
While there are no guarantees, there may be important benefits that the proposed consolidation could provide, including:
- A higher postconsolidation price per share could make Aurcana eligible for investment by a large base of potential new investors, who cannot otherwise invest below a minimum per-share value.
- A larger investors pool may also result in a possible increase in trading volumes.
- A higher postconsolidation price per share could also improve the company's ability to pursue a dual listing on a major exchange and finance in the market, if warranted in the future.
- An increase in the share price in absolute dollar terms may improve the market perception of Aurcana's stock.
- The proposed consolidation could also align the company's number of outstanding shares relative to its peers.
If approved, the consolidation would reduce the company's 467,157,647 issued and outstanding common shares to approximately 58,394,706 common shares. The exercise or conversion price of outstanding stock options and warrants would be proportionately adjusted based upon the same consolidation ratio. The company name will remain unchanged after the consolidation.
The proposed consolidation is subject to the approval of the TSX Venture Exchange and Aurcana's shareholders.
Full details regarding the proposed consolidation will be included in the information circular to be mailed to all Aurcana shareholders of record on Feb. 26, 2013, and posted on SEDAR in connection with the special meeting of shareholders, which is scheduled to be held on Thursday, March 28, 2013.
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