Algoma Steel Announces Preliminary Results of Substantial Issuer Bid
28 July 2022 - 09:30PM
Algoma Steel Group Inc. (NASDAQ, TSX: ASTL) (“Algoma” or the
“Corporation”) today announced the preliminary results of its
substantial issuer bid (the “Offer”), which expired at 5:00 p.m.
(Eastern Time) on July 27, 2022.
Based on the preliminary count by TSX Trust
Company, the depositary for the Offer (the “Depositary”), a total
of 60,600,233 common shares of Algoma (“Shares”) were properly
tendered and not properly withdrawn, including 2,834,014 Shares
that were tendered through notice of guaranteed delivery. In
accordance with the terms of the Offer, Algoma has informed the
Depositary that it is taking up Shares properly tendered to the
Offer at the time of expiry, subject to proration (as described
below). Based on the preliminary count by the Depositary, Algoma
expects to take up and purchase for cancellation 41,025,641 Shares
at a purchase price of US$9.75 per Share for an aggregate purchase
price of approximately US$400 million. The Shares expected to be
purchased under the Offer represent approximately 27.9% of the
issued and outstanding Shares at the time that the Offer was
commenced. Immediately following completion of the Offer, Algoma
anticipates that 105,403,930 Shares will be issued and
outstanding.
As the Offer was oversubscribed, shareholders
who made auction tenders at a price of US$9.75 or less per Share
and purchase price tenders are expected to have approximately 95.2%
of their successfully tendered Shares purchased by Algoma (other
than “odd lot” holders, whose Shares will be purchased on a
priority basis). Shareholders who made auction tenders at a price
in excess of US$9.75 per Share should not expect to have any of
their Shares purchased by Algoma.
The number of Shares properly tendered and not
properly withdrawn, the number of Shares expected to be purchased,
the purchase price and the proration factor are all preliminary and
subject to verification by the Depositary as well as the proper
delivery of all Shares tendered (including Shares tendered pursuant
to guaranteed delivery procedures). The final number of Shares
purchased, the final purchase price, and the estimated paid-up
capital per Share and “specified amount” (each for purposes of the
Income Tax Act (Canada)) will be announced following completion by
the Depositary of the verification process and the guaranteed
delivery period. Promptly after such announcement, payment for the
Shares accepted for purchase will be made in accordance with the
terms of the Offer, and the Depositary will return all other Shares
tendered and not purchased.
BMO Nesbitt Burns Inc. and BMO Capital Markets
Corp. acted as dealer managers for the Offer and TSX Trust Company
acted as the Depositary. Any questions regarding the Offer may be
directed to the dealer managers or the Depositary.
The full details of the Offer are described in
the offer to purchase and issuer bid circular dated June 21, 2022,
as well as the related letter of transmittal and notice of
guaranteed delivery, copies of which were filed and are available
under the Corporation’s profile on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov.
This news release is for informational purposes
only and is not intended to and does not constitute an offer to
purchase or the solicitation of an offer to sell Shares.
ADVISORY REGARDING FORWARD-LOOKING
STATEMENTS – This news release contains forward-looking
statements or information (collectively, “forward-looking
statements”) within the meaning of applicable securities
legislation, including Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements include: number of Shares
properly tendered and not properly withdrawn; number of Shares
tendered through notice of guaranteed delivery; expected purchase
price per Share and aggregate purchase price; number of Shares to
be taken up and cancelled; the number of Shares expected to be
issued and outstanding after completion of the Offer; pro ration
factor; and timing for completion of the Offer. Forward-looking
statements involve assumptions, risks and uncertainties that may
cause such statements not to occur or results to differ materially.
These assumptions include: number of Shares properly tendered and
not properly withdrawn prior to expiration of the Offer; and that
Shares tendered through notice of guaranteed delivery will be
delivered within the prescribed two trading day settlement period.
Risks and uncertainties include: satisfaction of conditions
associated with the Offer; changes in or interpretation of laws or
regulations; and other risks and uncertainties as described in the
Annual Report on Form 20-F filed by Algoma with the Ontario
Securities Commission (the “OSC”) (available under Algoma’s SEDAR
profile at www.sedar.com) and with the Securities and Exchange
Commission (the “SEC”) (available at www.sec.gov), as well as in
the other documents Algoma has filed with the OSC and the SEC.
Forward-looking statements speak only as of the date they are
made.
Although Algoma believes such forward-looking
statements are reasonable, there can be no assurance they will
prove to be correct. The above assumptions, risks and uncertainties
are not exhaustive. Forward-looking statements are made as of the
date hereof and, except as required by law, Algoma undertakes no
obligation to update or revise any forward-looking statements.
About Algoma Steel
Based in Sault Ste. Marie, Ontario, Canada,
Algoma is a fully integrated producer of hot and cold rolled steel
products including sheet and plate. With a current raw steel
production capacity of an estimated 2.8 million tons per year,
Algoma’s size and diverse capabilities enable it to deliver
responsive, customer-driven product solutions straight from the
ladle to direct applications in the automotive, construction,
energy, defense, and manufacturing sectors. Algoma is a key
supplier of steel products to customers in Canada and Midwest USA
and is the only producer of plate steel products in Canada.
Algoma’s mill is one of the lowest cost producers of hot rolled
sheet steel (HRC) in North America owing in part to its
state-of-the-art Direct Strip Production Complex (“DSPC”), which is
the newest thin slab caster in North America with direct coupling
to a basic oxygen furnace (BOF) melt shop.
Algoma has achieved several meaningful
improvements over the last several years that are expected to
result in enhanced long-term profitability for the business. Algoma
has upgraded its DSPC facility and recently installed its No. 2
Ladle Metallurgy Furnace. Additionally, Algoma has cost cutting
initiatives underway and is in the process of modernizing its plate
mill facilities.
Today Algoma is on a transformation journey,
investing in its people and processes, optimizing and modernizing
to secure a sustainable future. Our customer focus, growing
capability and courage to meet the industry’s challenges head-on
position us firmly as your partner in steel.
For more information, please contact:
Mike
Moraca Treasurer and Investor Relations Officer Algoma Steel Inc.
Phone: 705.945.3300 E-mail: IR@algoma.com |
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