CCO to sell holding in Energy ResoucesCameco to sell holding in ASX-listed Energy Resources
Cameco Corp (TSX:CCO)
Shares Issued 173,872,431
Last Close 10/7/2005 $61.16
Tuesday October 11 2005 - News Release
Mr. Bob Lillie reports
CAMECO TO SELL SHARES IN AUSTRALIAN COMPANY
Cameco Corp. plans today to sell its entire 6.7-per-cent interest in Energy Resources of Australia Ltd. (ERA), a uranium producer listed on the Australian Stock Exchange (ASX).
"We have decided to exit a passive equity investment in ERA and redeploy our resources more strategically into operations where we have greater control and receive production rather than dividends," said Jerry Grandey, Cameco's president and chief executive officer. "This transaction gives us additional financial flexibility as we pursue our vision to become a dominant nuclear energy company producing uranium fuel and generating clean electricity."
With a public float of less than 7 per cent, ERA shares have traded in a range during the last six months that would indicate a value of Cameco's interest in ERA between $102-million and $213-million. The final amount Cameco receives for its investment may be higher or lower due to investor interest in the ERA shares to be sold and fluctuations in ERA share price and foreign currency exchange rates. Cameco will be required to pay transaction fees and taxes on the final amount which the company expects to receive by December.
Cameco and two other minority ERA shareholders intend to offer their ERA shares for sale after converting their unlisted shares in ERA to listed Class A shares prior to the offering. The offering will be made to professional investors in Australia and other jurisdictions. This ERA share sale must meet a number of conditions before it can proceed.
Cameco acquired a 6.45-per-cent interest in ERA in 1998 as part of the agreement to purchase Uranerz Exploration and Mining Ltd. and added a 0.25-per-cent interest in 2003. Cameco's current carrying value for its 12.8 million ERA shares is $18.2-million.
The ERA shares to be sold have not and will not be registered under the United States Securities Act of 1933, as amended, and cannot be offered or sold in the United States to any person absent registration or an applicable exemption from registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.