Ram Power shares drop after announcement of $50m offering

Ram Power shares drop after announcement of $50m offering ThermaSource drilling rig on project site at San Jacinto, Nicaragua (source: Ram Power)
Alexander Richter 27 Apr 2011

Geothermal Development company Ram Power announces $50 million share offering through a syndicate of investment banks on the Toronto Stock Exchange. As a result the stock price has fallen right now up to 17%.

In a release, “Ram Power, Corp. (TSX: RPG) announces, that it has entered into an agreement with Cormark Securities Inc., on behalf of a syndicate including Raymond James Ltd., Jacob Securities Inc., and Wellington West Capital Markets Inc. under which the Underwriters will offer on a marketed, underwritten basis up to $50,000,000 of units. Each Unit shall consist of one common share of the Company and one Common Share purchase warrant.

Each Warrant shall be exercisable for one Common Share for a period of 36 months from the completion of the Offering, subject to earlier termination in the event that the 20 trading day volume weighted average trading price of the Common Shares is equal to or greater than 150% of the exercise price of the Warrants. Pricing of the Units, the exercise price of the Warrants, and the total number of Units to be sold pursuant to the Offering will be determined in the context of the market immediately prior to filing the final short form prospectus in respect of the Offering. The Company has granted to the Underwriters an option, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 15% of the Units sold under the Offering for the purposes of satisfying over-allotments, if any, and for market stabilization purposes.

The Units will be offered by way of a short form prospectus in all provinces of Canada, except Quebec, and on a private placement basis in the U.S. pursuant to Rule 144A and/or Regulation D, as well as in other jurisdictions as may be determined by the Company and the Underwriters. A preliminary short form prospectus in respect of the Offering has been filed with and a receipt has been issued by the securities regulatory authorities in each of the Provinces of Canada, other than Quebec.

The Company has applied to the Toronto Stock Exchange to list the Warrants for trading on the TSX.

The net proceeds from the Offering will be primarily used to fund the remaining equity requirements for the construction of the Company’s San Jacinto-Tizate project site near Leon,Nicaragua and for working capital purposes.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX and the applicable securities regulatory authorities.”

Source: release via newswire