Inco to redeem preferreds, debentures

Inco (N-T) will spend US$665 million in order to redeem, on May 1, all its outstanding 5.5% convertible Series E preferred shares, plus all of its outstanding 5.75% convertible debentures due in 2004.

For each Series E share, Inco will pay US$51.10 plus all accrued and unpaid dividends up to the redemption date.

Series E shareholders may choose to convert their holdings into common Inco shares at the rate of 1.19474 common shares per series E share held prior to the redemption date. However, this represents an effective conversion price of US$41.85 per share, whereas common shares were trading at just US$18.52 at presstime.

Based on the 9.4 million Series E shares issued and outstanding, Inco will be paying about US$487 million for the redemption. This sum includes a US$10.4-million premium based on the US$50 issue price and US$4.3 million in accrued dividends.

Series E shares trade on the New York and Toronto stock exchanges. Inco has no other preferred shares outstanding.

Inco will pay another US$178 million to redeem its 5.75% convertible debentures due 2004, including US$3.3 million in accrued interest. The company will pay US$1,011.50 per US$1,000 in principal amount for each convertible debenture.

At the holder’s option, debentures may be converted into common Inco shares up until the close of business on April 28, 2003, at a conversion price of US$30, or about 33.33 shares for each convertible debenture.

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