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Replies to post #2687 on Elah Holdings Inc fka RELYQ (ELLH)
As previously disclosed, the subscription price will be determined by a formula applying a 25% discount to the 10-day volume weighted average price of Signature's common stock for the period January 12, 2015 through January 26, 2015, but in no event greater than $6.50 per share, which was the price offered in the Company's common stock offering completed December 19, 2014.
01/30/15 7:41 AM
We are conducting a rights offering pursuant to which we are distributing at no charge to the holders of our common stock subscription rights to purchase up to 9,751,773 shares of our common stock (the “Rights Offering”). Holders of our common stock will receive one subscription right for each share of our common stock owned at 5:00 p.m. in New York City, on January 28, 2015 (the “Effective Date”). The subscription rights will be transferable prior to their exercise only to the extent that the shares of common stock to which they are attached are transferred from and after the Effective Date. Subscription rights attach to the common stock in respect of which they are issued and will not be separately transferable. Our common stock is traded on the OTCQX Marketplace under the symbol “SGGH.” On January 28, 2015, the last reported sale price of our common stock was $7.45 per share.
Each subscription right will entitle the holder to purchase 0.562 shares of our common stock at an exercise price of $5.64 per share. Holders will also have oversubscription rights, pursuant to which holders may be able to purchase additional shares of common stock at the exercise price to the extent that holders do not exercise all of the subscription rights. If all of the subscription rights are exercised in this Rights Offering, excluding the subscription rights held by the holders of the warrants described below, the total purchase price of all of our common stock sold in the Rights Offering will be $55 million.
Separately, in this Rights Offering, we are distributing, at no charge to the holders of our 1.5 million warrants (“Warrants”), subscription rights to purchase an aggregate of 843,000 shares of our common stock. These nontransferable subscription rights are issued pursuant to the terms of the warrant agreements for such Warrants and expire 90 days after the Effective Date. These subscription rights will also entitle the holder of Warrants to purchase 0.562 shares of common stock per Warrant at an exercise price of $5.64 per share. Holders of Warrants will also have oversubscription rights, pursuant to which holders of our Warrants may be able to purchase additional shares of common stock at the exercise price to the extent that holders of our Warrants do not exercise all of the subscription rights available in respect of the Warrants. If all of the subscription rights are exercised by the holders of Warrants in this Rights Offering, the total purchase price for such shares of our common stock will be $4,754,520.
This Rights Offering to our common stockholders is being conducted in connection with the pending acquisition (the “GRSA Acquisition”) by our wholly owned subsidiary, Real Alloy Holding, Inc. formerly SGH Acquisition Holdco, Inc. (“Real Alloy”), of all of the equity interests of certain entities, which, together with their subsidiaries (the “GRSA Entities”), comprise the global recycling and specification alloys business (“GRSA”) of Aleris Corporation (“Aleris”). We expect the consideration for the GRSA Acquisition to come from the financings described herein, including this Rights Offering, and cash on hand. This Rights Offering is conditioned upon, and will not close unless, the GRSA Acquisition is consummated. However, this Rights Offering is not contingent upon the other financings described herein. There can be no assurance that the GRSA Acquisition or such financings will be consummated on the terms described herein, or at all. See “The GRSA Acquisition and Financings.” We reserve the right to cancel this Rights Offering at any time. If this Rights Offering is canceled or if the GRSA Acquisition is not consummated, the exercise price will be promptly returned by mail to exercising holders, without interest or deduction. If the Rights Offering is canceled, the subscription rights will not be exercisable and will have no value. Delivery of purchased shares will take place as soon as practicable after the closing of the GRSA Acquisition.
The subscription rights are exercisable beginning on the date of this prospectus supplement and will expire if they are not exercised by 5:00 p.m. in New York City, on February 17, 2015 (the “Expiration Date”), unless extended by us from time to time in our sole discretion. Subscription rights that are not exercised by the Expiration Date of the Rights Offering will expire and will have no value.
During the period of the Rights Offering, i.e., following the Effective Date but prior to the Expiration Date, our common stock will trade along with the associated subscription rights as a unit under a new CUSIP 82670K128. Therefore, if a holder transfers shares of common stock during the period of the Rights Offering and prior to the exercise of such subscription right, the subscription rights associated with those shares of common stock will transfer along with the shares of common stock. Following the exercise of the subscription rights, the unit will terminate and the common stock to which the subscription rights had attached will be traded separately from such rights under a separate CUSIP 82670K201. The rights are not separately tradable. Whether or not a holder transfers the underlying common stock to which the subscription rights originally attached subsequent to any exercise of subscription rights, the new common stock in the subscription, and oversubscription as applicable, will be issued to the holder who exercised the subscription rights, and not any subsequent transferee of the underlying common stock. From and after the Expiration Date, our common stock will trade under CUSIP 82670K201.
Holders who exercise their subscription rights will not be entitled to revoke their exercise. Holders who do not exercise their subscription rights will relinquish any value inherent in the subscription rights and their relative ownership level of our outstanding common stock will decrease as a result of the increase in our outstanding common stock resulting from this Rights Offering.
02/11/15 8:18 AM
AI
