Maple Leaf Foods has raised $70 million through a ‘private placement’, rather than issuing new stock.
The embattled meat packer has suffered recently due to a listeriosis outbreak traced back to their sandwich meat operation that sickened many Canadians and caused a handful of deaths.
The move to raise private money resulted in the sale of 7,368,421 units at a price of $9.50 per unit. The net proceeds will be used for general corporate purposes.
“We believe this financing provides Maple Leaf Foods with the flexibility to support our strategic initiatives and rebuild our business through these difficult credit markets,” said Michael Vels, Chief Financial Officer. “At the same time, the structure provides the Company with the flexibility of reducing dilution to existing shareholders by providing us the option not to issue equity. The transaction also reflects the strong support of our major shareholders and other new investors.”
Each unit will consist of one subscription receipt for Maple Leaf Foods common shares and 0.4 common share purchase warrants.
Each subscription receipt will entitle the holder to receive one common share of the on August 4, 2009 or, at the election of the company, the return in cash of all the unit proceeds, being $9.50 per unit.
Each whole common share purchase warrant is exercisable into one common share until December 16, 2010 at a price of $9.50.