How they intend to pay for minority shares Am i reading this right? They have $200M in cash and a financing in place for an additional $300M if necessary?
Sounds like they are thinking they are going to need to pay full value to the minorities that stand their ground until the end. Why would they have arranged financing otherwise?
6. SOURCE OF OFFER CONSIDERATION
Nordgold estimates that if it acquires all of the outstanding High River Shares pursuant to the Offer and is
required to pay the maximum amount of cash payable pursuant to the Offer, the total cash consideration payable,
excluding any cash that may be payable by High River in lieu of fractional Nordgold GDRs, will be
approximately $210 million, assuming all High River Shareholders (other than the Locked-Up Shareholders)
elect the Cash Alternative.
Nordgold intends to finance the cash payable pursuant to the Offer with cash and cash equivalents on its
balance sheet. Nordgold has received a commitment letter from Raiffeisenbank in respect of a new six month
US$129 million credit facility denominated in Russian roubles which will bear interest at a variable rate of one
month Mosprime plus 2.9%. Nordgold has also received an indicative term sheet from Natixis, Sberbank and
Societe Generale in respect of a new six month US$300 million credit facility which will bear interest at a
variable rate of one month LIBOR plus margin of 2.25% during the first three months rising to a maximum
margin of 3.5% for the final three months depending on the timing of repayment. Nordgold anticipates finalizing
only one of the two available facilities. If finalized and drawn upon, the new Raiffeisenbank and Natixis,
Sberbank and Societe Generale facilities would contain customary events of default and would be repayable over
time with proceeds of capital markets issues and/or subsequent debt financings and/or freely available cash,
although Nordgold has no plans for such issues or financings at this time. Nordgold’s obligation to purchase the
High River Shares tendered to the Offer is not subject to any financing condition.