Key points
- MB Holding Company LLC, through a subsidiary, will act as standby purchaser for a fee of $2-million.
- The offering is open to shareholders of record as of April 25, 2013, with rights exercisable from May 1 to May 31, 2013.
- Each right entitles holders to acquire 0.844335 of a common share, and net proceeds will fund three key contracts for the Solwara 1 sea floor production system.
- The rights will trade on the Toronto Stock Exchange, with shares trading ex-rights starting April 23, 2013.
Nautilus Minerals Inc. has filed a final short-form prospectus in each province of Canada, other than Quebec, in respect of its previously announced fully backstopped rights offering to raise gross proceeds of $40-million through the issuance of rights to subscribe for an aggregate of 200 million common shares at a subscription price of 20 cents per common share. The offering is being made to all eligible existing shareholders, as disclosed in the final prospectus.
One of the company’s major shareholders, MB Holding Company LLC, through a wholly owned subsidiary, will act as standby purchaser in respect of the full offering by purchasing all of the common shares that are not otherwise subscribed for by eligible existing shareholders under the offering, subject to certain conditions as disclosed in the standby purchase agreement, which has been filed on SEDAR, in consideration for a fee of $2-million.
Nautilus’s chief executive officer, Mike Johnston, commented, “We felt it was important that all eligible existing shareholders were provided with an opportunity to participate in the current offering, and we are very pleased with the demonstration of support from MB to ensure the offering is a complete success, which will enable the company to be in the best possible position to advance the Solwara 1 project following resolution of the dispute with the state of PNG.”
The net proceeds from the offering will be used by the company to continue financing its three key contracts related to its sea floor production system, intended to be used at the company’s Solwara 1 project.
The offering is being made to the holders of Nautilus common shares of record at the close of business (Vancouver time) on April 25, 2013. The rights available under the offering will be eligible for exercise from May 1, 2013, to May 31, 2013, at 2 p.m. (Vancouver time).
The company will issue one right for each outstanding common share. Each right will be exercisable to acquire 0.844335 common share of the company, upon payment of the subscription price. Fractional shares will not be issued. To illustrate, a holder of 1,000 shares as of the record date would, subject to the laws of their jurisdiction, be issued 1,000 rights, which would entitle him or her to subscribe for 844 shares for a price of $168.80 (844 times 20 cents).
The prospectus and a rights certificate will be mailed to each shareholder of record on April 25, 2013, subject to applicable law. The rights will be posted for trading on the Toronto Stock Exchange (on a when issued basis), and the company’s common shares will commence trading on TSX on an ex rights basis on April 23, 2013, and will continue until May 31, 2013, at 9 a.m. (Vancouver time).
Jefferies LLC acted as adviser to the special committee of the board of directors of Nautilus in relation to the rights offering.
