Barrick Gold Corporation (NYSE:ABX) plans $3 billion public equity offer to reduce debt, boost liquidity

Posted In Markets - By Carolin Roth On Monday, November 4th, 2013 With 0 Comments

Gold mining company Barrick Gold Corporation (NYSE:ABX) will make a public offer of 163.5 million common shares at $18.35 per share to raise about $3 billion. In a press release on Thursday, October 31, the company said that it has signed a pact with a consortium of underwriters led by RBC Capital Markets for this purpose. The other members of the consortium are Barclays and GMP Securities L.P.

According to the agreement, the underwriting consortium will also be given an option to buy an extra 24.5 million common shares at the same offer price by way of an over-allotment clause. The over-allotment option will be available for 30 days after closing of the main offer. If the underwriters go for the over-allotment in full, the total proceeds will increase to $3.45 billion, the company said.

After deduction of the commission being charged by the underwriters, the net proceeds will be about $2.9 billion for the main offer while it will be $3.3 billion if the over-allotment option is fully exercised.

The money raised from the public equity offer including any that may come from over-allotment will be used to redeem or repay some of the company’s short and medium term debt including any guaranteed by it and to bolster its balance sheet and enhance its long range liquidity situation. About $2.6 billion of the net amount raised would be used for debt restructuring purposes, the company said.

Specific details of the company’s debt restructuring plan and fund use plan can be found in the registration statement, prospectus and documents filed by the company with the SEC. The public offer may close on or around November 14, 2013 and will be subject to the usual regulatory approvals and conditions.

About the Author

- Carolin Roth graduated from North Dakota University getting both Bachelor’s and Master’s Degrees in Broadcast Journalism.

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