Prairie Provident (TSX:PPR) closes AU$10mn subscription

2 min read | October 01, 2024 12:38 AM EDT | By Team Kalkine Media

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Prairie Provident (TSX:PPR) closes AU$10mn subscription — Image source: © Cammeraydave | Megapixl.com

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Prairie Provident Resources Inc. (TSX:PPR) has successfully closed an initial $10 million subscription by its principal shareholder, PCEP Canadian Holdco, LLC (PCEP), as part of the company’s previously announced $13.2 million rights offering. This development marks a significant step in the company's efforts to enhance its capital structure and strengthen its financial position.

Under the terms of the rights offering, Prairie Provident has made available up to 529,579,000 common shares at a subscription price of $0.025 per share, amounting to a potential total of $13,239,475 if fully subscribed. PCEP's investment of $10 million represents approximately 75.5% of the rights offering and allows it to acquire an additional 400,000,000 common shares. Part of the subscription price was offset against a prior advance of US$2.3 million received under the company's second lien note facility in May 2024, effectively extinguishing that debt. The remaining $6.87 million was paid in cash.

In addition to PCEP’s significant investment, the company's directors and management have collectively subscribed for $400,000, resulting in an additional 16,000,000 common shares to be issued upon the conclusion of the rights offering.

The rights offering remains open for eligible holders, who may exercise their subscription rights until 5:00 p.m. (Mountain Time) on October 28, 2024. After this deadline, any unexercised rights will automatically terminate and become void. The trading of these rights has commenced on the Toronto Stock Exchange under the symbol “PPR.RT” and will continue until 12:00 p.m. (Eastern Time) on October 28, 2024.

Additionally, PCEP has a $1.6 million standby commitment for the rights offering. This arrangement allows PCEP to purchase up to 64,000,000 additional common shares after accounting for shares acquired through the exercise of rights by other holders, including directors and management. The final number of additional shares that PCEP may acquire will be determined after the rights offering has closed and all subscriptions have been counted.

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