Here's the press release. it arrived in my e-mail. Can anyone interpret this in terms of its short and long-term impact on share price.
$175m bought deal to finance merger
Kinross Gold Corporation K
Shares issued 124,765,107 Feb 6 close $5.25
Mon 9 Feb 98 News Release
Also Amax Gold Inc (AXG)
Mr Robert Buchan reports
Kinross Gold has entered into a $175 million bought deal financing arrangement with an underwriting syndicate led by CIBC Wood Gundy Securities. Pursuant to the underwriting agreement, Kinross will issue 34,653,465 subscription rights at $5.05, each representing the right to receive one share upon closing of the merger transaction between Kinross and Amax Gold. After completion of the merger, Kinross will be the fifth largest gold producer in North America with annual production of 12 million
ounces and a market capitalization of approximately US$1 billion.
Kinross has granted the underwriters an over-allotment option until the closing date of the equity offering to purchase an additional 10% of the issued subscription rights representing shares.
The subscription rights will yield net proceeds to Kinross of approximately $168 million, prior to the over-allotment option, which amount will be held on deposit with a trustee pending the closing of the merger transaction. Net proceeds will be used to repay long term debt of the new Kinross. Kinross will file a preliminary short form prospectus in all provinces in Canada in respect of the subscription rights. Subscription rights are being offered to the public in Canada only and in the US on a private placement
basis. Subject to the receipt of all required securities approvals, the offering of subscription rights is expected to close by March 3 1998. In the event the merger transaction is not completed by June 29 1998, subscription rights holders will have an option to receive the following: 100% of the initial investment plus accrued interest in cash; or, 50% of the initial investment in Kinross shares at the issue price of subscription rights and 50% of the initial investment plus accrued interest in cash.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Helmut |
