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Ascot Resources Ltd (TSXV: AOT.H; OTCQB: AOTVF) has announced a strategic rights offering aimed at generating up to C$14,871,517 in gross proceeds. This initiative provides current shareholders with an opportunity to enhance their investment in the company by acquiring additional shares at a preferential price.
Table of Contents:
Understanding the rights offering
This rights offering will distribute a total of 1,487,151,720 rights to existing holders of Ascot’s common shares, effective as of the close of business on the record date.
Each shareholder will receive one right for every common share they own. The rights will enable them to subscribe for one additional share, referred to as a Rights Share, priced at C$0.01 each through the Basic Subscription Privilege.
Key details of the offering
The rights associated with this offering will not be traded on any exchange and will expire at 5:00 p.m. (Toronto time) on the specified expiration date. After this expiration, any unexercised rights will become void and without value. Shareholders who fully exercise their rights will have the opportunity to request additional shares from any rights that remain unexercised through the Additional Subscription Privilege, subject to specific limitations outlined in the company’s offering circular.
Standby agreement and expected timelines
To facilitate the rights offering, Ascot Resources has established a standby agreement with Fiore Management and Advisory Corp. This agreement guarantees that Fiore will purchase any shares not acquired by existing shareholders during the rights offering. The offering circular will be accessible on SEDAR+ and will be distributed to shareholders residing in designated eligible jurisdictions.
All registered shareholders in Canada who wish to participate must submit their completed subscription forms along with the necessary funds to the rights agent, Computershare Investor Services Inc., before the specified expiration time. Shareholders who hold shares through intermediaries will receive instructions directly from their brokers.
Impact on share structure
Upon successful completion of the rights offering, assuming all rights are exercised, Ascot Resources 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 available in the market. This substantial increase in shares will affect the company’s overall capitalization and share distribution.
Future plans and financial implications
Ascot plans to implement a 50:1 share consolidation following its rights offering. It is important to note that the rights offering will close based on the pre-consolidated share count. In addition, the company intends to execute a private placement of subscription receipts, with details contingent upon market conditions.
This strategic initiative highlights Ascot’s commitment to addressing its financial obligations. The net proceeds from the rights offering are primarily allocated for settling outstanding debts with creditors, establishing a more robust financial foundation. The success of this offering is critical; if sufficient funding is not secured, the company may need to initiate proceedings under the Companies’ Creditors Arrangement Act (CCAA).
Accessing more information
Individuals seeking comprehensive details about the rights offering can find the official notice and circular on Ascot’s SEDAR+ profile, as well as on its corporate website. Prospective investors are urged to examine these documents carefully prior to making any investment decisions.
This announcement does not represent an offer or solicitation for securities in any jurisdiction where such action would be deemed illegal. The shares being offered have not yet been registered in the United States and cannot be sold there unless under specific exemptions.
Amid these developments, Ascot Resources Ltd is working to navigate the complexities of the mining sector while striving to enhance shareholder value and secure its operational future.
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