MND halt
Mandalay holder West Face arranges secondary offering
2014-08-14 16:11 ET - News Release
Mr. Brad Mills reports
MANDALAY RESOURCES CORPORATION AND WEST FACE CAPITAL INC ANNOUNCE C$44 MILLION SECONDARY OFFERING
A fund advised by West Face Capital Inc. has entered into an agreement with BMO Capital Markets and Mandalay Resources Corp. to complete a secondary offering, on a bought-deal basis, under which BMO Capital Markets has agreed to purchase 40 million common shares of the company held by West Face at a purchase price of $1.10 per common share for gross proceeds of $44-million. West Face has granted the underwriter an option, exercisable at the offering price for a period of 30 days following the closing of the offering, to purchase up to an additional six million common shares to cover overallotments, if any, and for market stabilization purposes. The maximum gross proceeds of the offering will be $50.6-million should this option be exercised in full. The company will not receive any proceeds from the offering.
West Face is company's largest shareholder and currently owns approximately 40.1 per cent of the company's issued and outstanding common shares. Following the closing of the offering, West Face will continue to hold 96,987,938 common shares of the company, representing approximately 28.4 per cent of the outstanding shares. If the overallotment option is exercised in full, West Face will hold 90,987,938 common shares of the company, representing approximately 26.6 per cent of the outstanding shares.
"West Face has been a significant shareholder of Mandalay since 2010, and we have been very pleased with our investment," said Greg Boland, president and chief executive officer of West Face. "Given the market value of our holding in Mandalay relative to the market capitalization, we have decided at this time to monetize a portion of our investment. We will continue to retain a significant stake in Mandalay and look forward to the continued growth of our investment."
The common shares will be offered by way of a short-form prospectus in all of the provinces and territories of Canada, excluding Quebec and may also be offered by way of private placement in the United States. A preliminary short-form prospectus relating to the offering will be filed with the applicable Canadian securities regulatory authorities no later than Aug. 20, 2014. The offering is subject to certain conditions, including the receipt of all necessary regulatory approvals. The offering is expected to close on or about Sept. 9, 2014.
