WELLAND, ON, Feb. 10 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside Steel" or the "Company") today announced that it intends to raise gross proceeds of $3,000,000 in a brokered private placement of units ("Units") at a price of $0.27 per Unit on a best efforts basis (the "Private Placement"). Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one common share of Lakeside Steel at a price of $0.40 for a two year period from closing of the Private Placement.
In connection with the Private Placement, a significant shareholder of Lakeside Steel, Jaguar Financial Corporation (TSX: JFC), or certain other insiders of the Company may complete a "gypsy swap" whereby they would sell up to 17,000,000 common shares of Lakeside Steel in pre-arranged trades over the facilities of the TSX Venture Exchange, and then buy up to 17,000,000 units under the Private Placement and thereafter transfer the associated warrants to the applicable counterparties to the pre-arranged trades for nominal consideration pursuant to applicable prospectus and registration exemptions.
The Private Placement will be led by a syndicate of agents led by Northern Securities Inc. and will also include Octagon Capital Corporation and Byron Securities Limited (together, the "Agents"). Lakeside Steel is a connected issuer to Northern Securities Inc. under applicable securities laws. Lakeside Steel will pay the Agents a cash commission of 8% of the gross proceeds of the Private Placement, and that number of broker warrants equal to 10% of the number of Units sold in the Private Placement. Each broker warrant will be exercisable into one Unit. Lakeside Steel has granted the Agents an over-allotment option to raise up to an additional $2,000,000 at any time prior to closing, on the same terms as the Private Placement.
The Private Placement and any gypsy swap are scheduled to close on or about February 25, 2010, and are subject to regulatory approval, including final approval of the TSX Venture Exchange. Proceeds of the Private Placement will be used for capital expenditures such as the installation of a casing threading line and for general corporate purposes. The common shares and warrants issued pursuant to the Private Placement will be subject to a four-month hold under applicable securities laws.
About Lakeside Steel
Lakeside Steel is a 2010 TSX Venture Exchange 50 company and the parent company of Lakeside Steel Corp. ("Lakeside") Lakeside, located in Welland, Ontario, is a diversified steel pipe and tubing manufacturer. Lakeside's list of customers includes large oil and gas, mining, automotive and commercial and industrial supply companies. In addition to supplying its products in these industries, Lakeside manufactures pipe and mechanical tubing for the resale market, which is sold to distributors in Eastern Canada and the Northeastern United States. Lakeside manufactures a variety of products for these industries including oil well tubing and casing, mechanical tubing, pressure tubing, automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside serves customers worldwide, either directly or indirectly, in Canada and the United States.
This press release may contain forward-looking statements with respect to the Company, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Management's Discussion and Analysis and Filing Statement of the Company which are available at www.sedar.com. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Lakeside Steel was recognized as a TSX Venture 50(R) company in 2010. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.
SOURCE LAKESIDE STEEL INC.
For further information: For further information: Ron Bedard, President & Chief Operating Officer, Lakeside Steel Inc., Tel: (905) 735-7473, Fax: (905) 735-9069, firstname.lastname@example.org; Ken Hunter, Chief Financial Officer, Lakeside Steel Inc., Tel: (905) 735-7473, Fax: (905) 735-9069, email@example.com