16 May 2012 5N Plus announces 40m dollar in equity financing
5N Plus Inc of Montreal,Quebec,Canada,a producer of specialty metal and chemical products,has entered into agreements regarding an equity financing of an aggregate of 12,903,613 units at a price of 3.10 dollar per unit,for total gross proceeds of 40m dollar.The firm intends to use the net proceeds to reduce its indebtedness under its revolving credit facility and for general corporate purposes.
Each unit will consist of one common share and one-half of a common share purchase warrant.Each full warrant will entitle its holder to acquire one additional common share of 5N Plus at a price of 5 dollar for 24 months.
5N Plus focuses on specialty high-purity metals such as tellurium,cadmium,selenium,germanium,indium and antimony and also produces related II-VI semiconducting compounds such as cadmium telluride(CdTe),cadmium sulphide(CdS)and indium antimonide(InSb)as precursors for the growth of crystals for electronic applications,including solar photovoltaic,radiation detector and infrared markets.In addition,in April 2011,5N Plus acquired MCP Group SA of Tilly,Belgium,a producer and distributor of bismuth and bismuth chemicals(with a 50%global market share)as well as other specialty metals(including gallium,indium,selenium and tellurium).
However,last quarter 5N Plus incurred impairment charges of 45.6m dollar,resulting mainly from the"current turmoil"in the solar market and the corresponding impact on the selling price of solar-related products and the value of fixed assets used to manufacture or develop such products,says the firm.Specifically,the charges included total write-offs of fixed and intangible assets amounting to 12.2m dollar and total inventory write-downs of 33.4m dollar.
In connection with the latest financing,5N Plus has entered into an agreement for a syndicate of underwriters(led by National Bank Financial Inc)to purchase,on a bought-deal basis,6,452,000 units of 5N Plus at a price of 3.10 dollar per unit,yielding total gross proceeds of 20m dollar.The units will be offered by way of short-form prospectus in each of the provinces of Canada,as well as in the USA under applicable registration statement exemptions.5N Plus has also granted an over-allotment option(for a period of 30 days from the closing of the offering)entitling the underwriters to purchase up to 967,800 million additional units at a price of 3.10 dollar per unit(for additional gross proceeds of 3m dollar)to cover over-allotments and for market stabilization purposes,if any.
In addition,5N Plus has entered into an agreement for Investissement Québec to purchase(by way of concurrent private placement)6,451,613 units of 5N Plus at a price of 3.10 dollar per unit,yielding total gross proceeds of another 20m dollar.The common shares and warrants issued under the private placement will be subject to a statutory four-month hold period.
In connection with the public bought-deal offering,5N Plus will file a preliminary short-form prospectus in all provinces of Canada by 23 May.In addition to to customary closing conditions,the prospectus offering and concurrent private placement are subject to all standard regulatory approvals(including that of the Toronto Stock Exchange)and are expected to close on or about 6 June.
