Breakwater boosts financing (October 08, 2003)

Breakwater Resources (BWR-T) has raised $30 million via the private placement of 85.8 million subscription receipts at 35 apiece.

The offering was originally planned to raise $25 million, but the underwriters, led by Griffiths McBurney & Partners, exercised their option on an extra 14.3 million receipts to boost net proceeds by $5 million.

The receipts are exercisable for one share in Breakwater pending the satisfaction of certain escrow conditions including Breakwater arranging to pay down about half of its US$17.6-million non-revolving facility and US$6.5-million supplemental term facility at an equal rate.

Breakwater must also ink a deal to extend the maturity of each facility by four years to January 2008. Finally, the company is required to maintain its existing US$30-million revolving facility; at the end of June, US$11.3 million had been drawn under the revolver.

Breakwater has 60 days to satisfy the conditions.

The company plans apply about $16.7 million of the proceeds to pay down the non-revolving and supplemental term facilities. The balance will go toward general corporate and working capital purposes.