VBN redemption gets nod

At a special meeting in Toronto, shareholders of Inco‘s (N-T) Class VBN shares (NV-T) voted in favour of amending the terms of the shares, thereby accepting a redemption offer from Inco.

The company can now redeem each VBN share for $7.50 cash (or the equivalent in U.S. dollars) and 0.45 of an Inco common-share purchase warrant. Each whole warrant allows the holder to buy an Inco common share before Aug. 22, 2006, at $30 (or the equivalent in U.S. dollars). The redemption will be effective Dec. 14, 2000. Of the total number of Inco’s voting securities that were present and voted on at the meeting, about 85% of the Class VBN Shares, 98% of Inco’s common shares and 94% Inco’s Series E preferred shares approved the amendments.

The proposed amendments required the approval of only two-thirds of the votes cast at the meeting by holders of: the Class VBN shares voting separately; and all of the company’s voting securities representing the Class VBN shares, common shares and Series E preferred shares, voting together.

Inco had originally offered to buy the series for $7.50 in cash plus 0.45 of a purchase warrant exercisable at $36. However, that offer required that 90% of the shares be tendered, and by the initial expiry date of Oct. 16, only 76% had been.

Among those accepting the offer was Franco-Nevada Mining (FN-T), which, with a 37% position, is the largest holder of Class VBN shares.

Inco is funding the $7.50-per-share payment with $150 million in cash on hand and $45 million from borrowings under available credit lines.