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Ascot Resources Ltd. (TSXV: AOT.H; OTCQB: AOTVF), a notable entity in the mining sector, has announced a new financial strategy. The company is launching a rights offering aimed at raising C$14,871,517. This initiative offers existing shareholders the chance to acquire additional shares at a significantly reduced price of C$0.01 each.
The rights offering is designed to benefit current shareholders by enabling them to subscribe for new shares.
For every common share held as of the record date, shareholders will receive one right. Each right permits the holder to purchase one additional common share, known as a Rights Share.
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Details of the rights offering
This offering provides a distinct opportunity for shareholders to enhance their investment in Ascot. Rights will be available to those holding common shares at the close of business on the record date. The subscription price of C$0.01 represents a substantial discount compared to the market value of the shares. However, it is important to note that these rights will not be listed on any stock exchange, meaning they cannot be traded.
Expiration and additional subscription privilege
Shareholders are urged to act quickly, as the rights will expire at 5:00 p.m. Toronto time on the specified date. Any rights not exercised by this deadline will become void. For those who fully exercise their rights, an Additional Subscription Privilege allows them to subscribe pro rata for any remaining unclaimed Rights Shares, thereby potentially increasing their stake in the company.
Standby agreement and closing process
In conjunction with this rights offering, Ascot has secured a standby agreement with Fiore Management and Advisory Corp. This arrangement ensures that Fiore will purchase any outstanding Rights Shares not acquired by shareholders, thereby reinforcing investor confidence in the offering.
The company anticipates that the rights offering will close pending the fulfillment of all requirements set by the TSX Venture Exchange. Shareholders in eligible jurisdictions across Canada will receive rights certificates and subscription forms shortly after the record date.
Implications of the offering
Upon successful completion of the rights offering, Ascot expects to have approximately 2,974,303,440 common shares outstanding. The new shares issued through this offering will represent around 50% of the total shares currently in circulation, significantly altering the company’s capital structure.
Additionally, the company plans to implement a 50:1 share consolidation following the closing of the rights offering. This consolidation aims to streamline the share structure and potentially enhance the trading values of the shares post-offering.
Use of proceeds and future plans
The funds raised through this rights offering are intended primarily for settling outstanding debts owed to creditors. This financial strategy is essential for stabilizing the company’s balance sheet and ensuring its operational viability moving forward.
For those considering investment opportunities, it is crucial to review the rights offering circular and notice, which will be available on the SEDAR+ platform. These documents will provide comprehensive details about the rights offering and its associated terms.
The rights offering is designed to benefit current shareholders by enabling them to subscribe for new shares. For every common share held as of the record date, shareholders will receive one right. Each right permits the holder to purchase one additional common share, known as a Rights Share.
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