VANCOUVER, Nov. 18, 2011 /CNW/ - NEMI Northern Energy and Mining Inc. (TSX: NNE.A) ("NEMI" or the "Company") announced today that it has formally commenced its previously
announced substantial issuer bid (the "Offer") pursuant to which the Company has offered to repurchase for
cancellation: (i) up to 38,000,000 of its outstanding Class A Common
Shares (the "Shares") at a purchase price of $1.06 per share (the "Share Purchase Price"); and (ii) up to $10,449,000 in principal amount of outstanding 8%
convertible debentures (the "Debentures") at a purchase price of $117.78 per $100 in principal amount of
Debenture (the "Debenture Purchase Price"), plus accrued and unpaid interest.
The Share Purchase Price represents a 10% premium over the closing price
of the Shares on the Toronto Stock Exchange on October 21, 2011, the
last full trading day immediately prior to the announcement of NEMI's
intention to make the Offer. The Debenture Purchase Price represents
an effective purchase price of $1.06 per Share, equal to the Share
Purchase Price, assuming that the Debenture holder had converted the
Debenture and tendered the Shares issuable on conversion under the
The formal offer to purchase and issuer bid circular, which includes a
copy of the formal valuation of the Shares prepared by Salman Partners
Inc. ("Salman"), together with the related letter of transmittal and notice of
guaranteed delivery (the "Offer Documents") containing the terms and conditions of the Offer and instructions for
tendering Shares and Debentures are in the process of being mailed
today to shareholders and Debenture holders and will be filed today
with applicable regulators and available on SEDAR at www.sedar.com in the coming weeks. The Offer will remain open for acceptance until
5:00 p.m. (Toronto time) on December 28, 2011, unless withdrawn or
extended by the Company.
The Offer is not conditional on any minimum number of Shares or
principal amount of Debentures being tendered to the Offer, but is
subject to other conditions customary for transactions of this nature
as disclosed in the Offer Documents.
After considering the valuation opinion provided by Salman, the Board of
Directors of the Company authorized the making of the Offer. The Board
of Directors' decision to authorize making the Offer was based on a
number of factors, including that the Offer is an equitable and
efficient means to distribute a majority of NEMI's current cash on-hand
to its securityholders, the deposit of Shares and Debentures is
optional and shareholders and Debenture holders are free to accept or
reject the Offer, and that, after giving effect to the Offer, the
Company is expected to have sufficient financial resources and working
capital to fund operations.
Michael Cooney, Chief Executive Officer and Chairman of the Company
beneficially owns or exercises control or direction over 6,597,000
Shares representing approximately 12.09% of the issued and outstanding
Shares as at November 15, 2011. Mr. Cooney intends to deposit 172,000
of the Shares owned or controlled by him under the Offer.
Andrew Williams, Chief Financial Officer of the Company beneficially
owns or exercises control or direction over 10,000 Shares representing
approximately 0.02% of the issued and outstanding Shares as at November
25, 2011. Mr. Williams intends to deposit 10,000 of the Shares owned
or controlled by him under the Offer.
Lyle Stein, a Director of the Company beneficially owns or exercises
control or direction over 176,500 Shares representing approximately
0.32% of the issued and outstanding Shares as at November 15, 2011. Mr.
Stein intends to deposit 67,000 Shares owned by him under the Offer and
Mr. Stein anticipates that up to 109,500 Shares over which Mr. Stein
exercises control may be tendered under the Offer.
Barry Shaw Jr., a Director of the Company beneficially owns or exercises
control or direction over 509,500 Shares representing approximately
0.93% of the issued and outstanding Shares as at November 15, 2011.
Mr. Shaw intends to deposit 251,000 of the Shares owned or controlled
by him under the Offer.
Todd Hooper, a Director of the Company, beneficially owns or exercises
control or direction over 1,000,000 Shares representing approximately
1.83% of the issued and outstanding Shares as at November 15, 2011.
Mr. Hooper does not currently intend to deposit any of the Shares owned
or controlled by him under the Offer.
In the event that any of Mr. Cooney, Mr. Williams, Mr. Stein, Mr. Shaw
or Mr. Hooper decide to deposit more Shares, less Shares or no Shares
at all under the Offer and if the Offer is successful, their respective
direct or indirect voting interest in the Company will increase or
decrease to a greater or lesser extent, depending on whether more or
fewer Shares are purchased by the Company pursuant to the Offer.
Neither the Company nor its Board of Directors makes any recommendation
to shareholders or Debenture holders as to whether to tender or refrain
from tendering their securities to the Offer.
Shareholders and Debenture holders are strongly urged to consult their
own financial, tax and legal advisors and to make their own decisions
as to whether to tender or refrain from tendering their securities to
the Offer and, if so, how many Shares, or what principal amount of
Debenture to tender.
This press release is for information purposes only and is not an offer
to buy or the solicitation of an offer to sell Shares or Debentures.
This news release includes forward-looking statements that are subject
to risks and uncertainties. All statements within, other than
statements of historical fact, are to be considered forward looking.
Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results
or developments may differ materially from those in forward-looking
statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include market
prices, continued availability of capital and financing, and general
economic, market or business conditions. There can be no assurances
that such statements will prove accurate and, therefore, readers are
advised to rely on their own evaluation of such uncertainties. We do
not assume any obligation to update any forward-looking statements.
SOURCE NEMI Northern Energy
For further information:
NEMI Northern Energy & Mining Inc.
(T) (415) 339-8825