Saskatchewan to sell Potash warrants

The province of Saskatchewan has arranged to sell 7.3 million special warrants of Potash Corp. of Saskatchewan (TSE) at $18.75 per warrant.

Subject to certain terms and conditions, each special warrant will entitle the holder to receive a unit consisting of one common share of Potash Corp. (PCS) and one half common share purchase warrant. A full purchase warrant will entitle the holder to acquire, until Oct. 1, 1994, one common share at $18.75.

Currently, the province owns 10.95 million shares of the PCS, the world’s largest publicly traded potash supplier. Another 11 million shares are held in support of provincial bonds that are exchangeable into PCS common shares. If the warrants are exercised and the bonds exchanged, the Saskatchewan government’s holding in the company would be reduced to approximately 1.2%. Potash Corp., which recently traded at $18.75, has 38.7 million common shares issued and outstanding.

The special warrant transaction, subject to regulatory approval, was completed on a bought deal basis with a group of investment dealers and is expected to close this month.

PCS President C.E. Childers said the sale does not affect the management or direction of the company. “The province of Saskatchewan has dealt with its shares as an investor and not as a manager. It has not voted its shares at shareholders’ meetings, so for the company it’s business as usual.” The transaction does not change the shareholder ownership restrictions regarding voting shares of PCS.