Orbite Aluminae Inc. is pleased to announce that it proposes to offer for sale a minimum of 8,500 units of the Company (each, a "Unit") and a maximum of 15,500 Units at a price of $1,000 per Unit for minimum gross proceeds of $8,500,000 and maximum gross proceeds of $15,500,000 (the "Offering").
Each Unit consists of $1,000 principal amount of 5% convertible unsecured unsubordinated debentures (the "Debentures") and 907 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 their issue date (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 $0.386 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 $0.386 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 the closing of the Offering at a price of $0.463 per Common Share.
In connection with the Offering, the Corporation has engaged Euro Pacific Canada Inc. (the "Agent") to offer the Units for sale to the public on a commercially reasonable efforts basis. For its services, the Agent 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 closing of the Offering at a price of $0.386 per Common Share. The Company also granted the Agent an option exercisable in whole or in part in the sole discretion of the Agent for a period of 30 days from the closing date, to purchase a number of additional Units equal to 15% of the number of Units issued under the Offering on the same terms as set forth above solely to cover over-allotments, if any, and for market stabilization purposes.
The Offering is expected to close on or about March 30, 2015. The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals (including Toronto Stock Exchange approval). The Units will be qualified for sale by way of a prospectus supplement to the Company's short form base shelf prospectus dated March 18, 2015, which will be filed in the all of the provinces of Canada.
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.
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