Stornoway Diamond Corp. (TSX:SWY, Stock Forum), a Montreal Quebec-based diamond exploration and development firm engaged in the exploration and development of Canadian diamond projects, announced today that the company had closed its recently announced public offering of 188.6 million subscription receipts at $0.70 per receipt for aggregate gross proceeds of $132.02 million.
According to the news release, the subscription receipts are expected to commence trading on Friday May 23, 2014 under the ticker symbol TSX:SWY.R.
In other news, the company also announced the closure of its previously announced private placements of 345,539,916 subscription receipts at $0.70 per receipt for aggregate gross proceeds of $241.88 million.
The release went on to note that, “The Public Offering and the Private Placements were made pursuant to the previously-disclosed binding financing commitment agreement, as amended (the "Agreement"), among the Corporation, Orion Co-Investments I Ltd., RQ and CDPQ for the construction of the Renard Diamond Project.”
Net proceeds from the public offering and the private placements will be held in escrow pending completion of the financing transactions outlined in the agreement. Upon satisfaction of the escrow release terms, subscription receipt holders will be entitled to receive one common share and one-half of one common share purchase warrant of Stornoway for each subscription receipt held.
Private placement subscription holders will receive one common share of Stornoway for every subscription receipt held.
Company president and CEO, Matt Manson, commented, “The successful closing of the public offering of subscription receipts is an important milestone for Stornoway, and a precondition for the completion of the overall project financing agreement announced on April 9th.”
He went on to explain, “This agreement contemplates financing commitments to fully fund the Renard Diamond Project through construction to the declaration of commercial production, including all contingencies, capital escalation allowances, working capital requirements, and financing costs.”
Then he concluded, “We look forward to submitting the balanced package of equity, debt and streaming agreement that we have arranged to our shareholders for their approval at a special meeting to be held in Montreal on June 26, 2014. Principal project construction is expected to commence upon the receipt of shareholder approval and the satisfaction of all remaining transaction conditions, including the completion of definitive documentation.”
If the escrow release conditions have not been satisfied by July 1, 2014, then the subscription receipts in both the public offering and private placements will be refunded to their holders at the original purchase price plus accrued interest.
Stornoway was in the news recently when the company obtained receipt for the final prospectus related to the subscription receipt offering eight days ago.
Shares climbed 11.27% on the news to $0.79 per share.
Currently there are 153.4m outstanding shares with a market cap of $121.2 million.