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Magellan Aerospace Corporation announces closing of financing and repayment of convertible debentures on maturity
TORONTO, Jan. 31 /CNW/ - Magellan Aerospace Corporation ("Magellan" or the "Corporation") announc...
About this update from Magellan Aerospace Corporation
[{"type":"text","content":"\n\n\n\nTORONTO, Jan. 31 /CNW/ - Magellan Aerospace Corporation ("Magellan" or\nthe "Corporation") announced the closing of the private placement of an\naggregate of $20.95 million principal amount 8.5% convertible unsecured\nsubordinated debentures due January 31, 2010 (the "New Debentures") the\nproceeds of which were used to fund, in part, the repayment of the\napproximately $70 million principal amount of outstanding 8.5% unsecured\nsubordinated debentures (the "Existing Debentures") which matured today.\n\n\nThe New Debentures are redeemable by Magellan for the first six months of\nthe term at 102.5% of principal value and the holders have no conversion\nrights. After the first six months of the term, the New Debentures are\nconvertible, at the option of the holder, at any time prior to maturity into\ncommon shares of Magellan at a conversion price of $2.00 per share, which is\nequal to a conversion rate of 500 common shares per $1,000 principal amount of\ndebentures or the issuance on conversion of approximately 10,475,000 common\nshares in total. Magellan's principal shareholder, N. Murray Edwards of\nCalgary, Alberta, acquired $17.5 million principal amount of the debentures.\nMr. Edwards indicated the acquisition of the debentures is for investment\npurposes and Mr. Edwards may, directly or indirectly acquire additional\nsecurities of Magellan depending on market conditions. If the debentures were\nconverted, Mr. Edwards would acquire an additional 8,750,000 common shares\nrepresenting an additional 8.6% of the issued and outstanding common shares of\nMagellan after conversion of all of the debentures. Mr. Edwards currently\nowns, directly or indirectly, 25,284,893 common shares (approximately 27.8% of\nthe issued common shares of Magellan) and 1,005,000 First Preferred Shares\nwhich are convertible into common shares of Magellan at $3.00 per share.\nAnother director of the Corporation acquired $650,000 principal amount of the\nNew Debentures and the remaining $2.8 million principal amount of the New\nDebentures was placed with other investors.\n\n\nIn order to fund the remaining balance of approximately $50 million on\nthe maturity of the Existing Debentures, Edco Capital Corporation ("ECC"), a\ncorporation controlled by Mr. Edwards, has provided a loan of $50 million (...