Ascot Resources Ltd, a significant entity in the mining sector, has announced its intention to execute a rights offering to raise approximately C$14,871,517. This initiative is particularly timely as the company aims to strengthen its capital structure and enhance its financial stability.
Table of Contents:
Understanding the rights offering
The rights offering involves the issuance of 1,487,151,720 rights allocated to existing common shareholders. These rights will be distributed based on a clear formula: for each common share held as of the record date of November 18, shareholders will receive one right.
Each right permits the holder to purchase an additional common share at a nominal price of C$0.01. This structure is intended to enable current shareholders to maintain their proportional ownership in the company.
Key details and deadlines
The rights will be available for exercise until 5:00 p.m. Toronto time on December 12. After this deadline, any unexercised rights will become void. Shareholders must act swiftly to take advantage of this offering. Additionally, those who fully utilize their rights will have the opportunity to subscribe for any remaining shares from unexercised rights, potentially increasing their holdings.
Standby purchase agreement with Fiore Management
To support this rights offering, Ascot has secured a standby purchase agreement with Fiore Management and Advisory Corp. Under this agreement, Fiore has committed to acquiring any rights shares not purchased by existing shareholders. This provision ensures that the company will achieve its funding target, as Fiore will cover any shortfall resulting from unexercised rights.
Distribution and eligibility
The rights will be available to shareholders residing in all Canadian provinces and territories. Registered shareholders in eligible jurisdictions must complete and submit their subscription forms along with the necessary payment to Computershare Investor Services Inc., which serves as the rights agent. Shareholders holding shares through intermediaries will receive communication and instructions via their respective brokers or banks.
Implications of the rights offering
Upon successful completion of the rights offering, and assuming all rights are exercised, Ascot will have a total of 2,974,303,440 common shares outstanding. The newly issued rights shares will represent approximately 50% of the total shares, thereby significantly affecting the company’s capital structure.
Following the completion of the rights offering, Ascot Resources plans to execute a 50:1 share consolidation. This consolidation will occur after the offering, reducing the total number of shares while aiming to enhance the overall share value. Additionally, the company is exploring a brokered private placement of subscription receipts, which will also take place after the consolidation.
Utilization of proceeds
The primary objective of this rights offering is to use the net proceeds to settle outstanding obligations to creditors. This approach is essential for ensuring the company’s financial stability and its ability to continue operations. The funds raised will be crucial in addressing debts and maintaining the operational integrity of Ascot Resources.
Further information and cautionary notes
Investors can find additional details regarding the rights offering in the offering circular and notice available on Ascot’s SEDAR+ profile. It is crucial for investors to review these documents carefully before making any investment decisions. This announcement does not constitute an offer to sell or solicit an offer to purchase securities in any jurisdiction where such an offering would be unlawful.
As Ascot advances with this rights offering, it remains subject to necessary approvals, including those from the TSX Venture Exchange. Shareholders and potential investors should remain vigilant about developments and timelines related to this offering.
