Galactic Holdings, a wholly- owned subsidiary of Vancouver- based Galactic Resources (TSE), recently announced a European public offering to help reduce a $14- million(US) debt load incurred during a takeover bid for New York- based Newmont Mining.
Under the terms of the offering, Galactic has agreed to sell $36 million in 7% exchangeable debentures due in 1995 to a syndicate led by McLeod Young Weir International of London, England, Gordon Capital Corp. and Kleinwort Benson Ltd.
The offering is guaranteed on a subordinated basis by Galactic Canada.
Each $1,000 in debentures can be exchanged for 16.15 common shares of Newmont Mining Corp. and 50.72 common shares of Galactic Canada from July 13 onwards.
After Jan 13, 1990, Galactic Holdings can call the debentures for redemption if the combined weighted average closing price of the Newmont and Galactic Canada common shares exceeds $1,250 over 30 consecutive days.
The transaction was scheduled to close on April 13.
After taking into account normal dividends payable on the Newmont Mining common shares, the interest rate of the exchangeable debentures is about 6.03%, Galactic says.
Galactic says it will use the proceeds to repay approximately $14 million incurred in connection with the acquisition of 665,000 Newmont shares through Galactic’s 10% investment in Ivanhoe Partners of Amarillo, Tex.
Led by Texas oilman T. Boone Pickens, Ivanhoe made an unsuccessful takeover bid for Newmont last year. The Vancouver company will finance its Carlin, Nev., and Oregon gold projects with the balance of the offering.
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