The Conversation (0)
Orbite Aluminae (TSX:ORT) announced that it has entered into an underwriting agreement to raise gross proceeds of $8.5 million. Euro Pacific Canada has agreed to buy 8,500 units at a price of $1,000 per unit, and may purchase an additional 6,500 units within 30 days of the bought deal closing of the offering, which would bring aggregate gross proceeds to $15 million.
Orbite Aluminae (TSX:ORT) announced that it has entered into an underwriting agreement to raise gross proceeds of $8.5 million. Euro Pacific Canada has agreed to buy 8,500 units at a price of $1,000 per unit, and may purchase an additional 6,500 units within 30 days of the bought deal closing of the offering, which would bring aggregate gross proceeds to $15 million.
Net proceeds of the offering will be used to fund the company’s high purity alumina production facility and for working capital and general corporate purposes.
As quoted in the publication:
Each Unit consists of $1,000 principal amount of 5% convertible unsecured unsubordinated debentures (the “Debentures”) and 1,077 share purchase warrants (each single share purchase warrant, a “Warrant”) of the Company (which is equivalent to 35% of the number of class A Shares (the “Common Shares”) into which the Debentures are convertible). The Debentures will mature five years from closing date of the bought deal offering (the “Maturity Date”) and will bear interest at a rate of 5% per annum payable semi-annually. Each Debenture will be convertible, at the option of the holder at any time prior to the Maturity Date, into the number of Common Shares computed on the basis of (i) the principal amount of the Debentures divided by the conversion price of $0.325 per Common Share (the “Conversion Price”), and (ii) an amount equal to the additional interest amount that such holder would have received if it had held the Debenture until the Maturity Date (the “Make-Whole Amount”) divided by the then 5 day volume weighted average trading price of the Common Shares on the TSX (the “Current Market Price”). The Make-Whole Amount shall be reduced by 1% for each 1% that the Current Market Price at time of conversion exceeds the Conversion Price. The aggregate number of Common Shares to be issued upon conversion of the Debentures and for any payment of the Make-Whole Amount in Common Shares shall not exceed the number of Common Shares equal to the principal amount of the Debentures divided by $0.325 less the 25% maximum discount allowable in accordance with the rules of the Toronto Stock Exchange. Each Warrant will be exercisable into one Common Share for a period of 36 months from their issue date at a price of $0.39 per Common Share.
For its services, the Underwriter will receive a cash commission equal to 6% of the gross proceeds raised under the Offering and that number of non-transferable broker warrants equal to 6% of the Common Shares into which the principal of the Debentures sold in the Offering are convertible. Each broker warrant will be exercisable into one Common Share for a period of 36 months from the applicable closing of the Offering at a price of $0.39 per Common Share.
The bought deal portion of the Offering is expected to close on or about April 6, 2015 and subsequent additional closings may follow. The Offering is subject to conditions, including, without limitation, receipt of all regulatory approvals (including Toronto Stock Exchange approval). The Units, including any additional Units sold pursuant to the Underwriter’s option are qualified for sale by way of the Company’s short form base shelf prospectus dated March 18, 2015 and prospectus supplement dated March 30, 2015, which have been filed in Quebec, Ontario, Alberta and British Columbia.
The net proceeds of the Offering will be used to fund the Company’s high purity alumina production facility in Cap-chat, Quebec and for working capital and general corporate purposes.
Click here to read the Orbite Aluminae (TSX:ORT) press release
