China Precision Steel (CPSL) Down Over 20% On Stock Offering
November 1, 2007 by Douglas A. McIntyreChina Precision Steel (CPSL) is selling a few extra shares to raise money. And that has driven the company’s stock down 20% to $6.75.
The company announced that it has entered into Subscription Agreements with certain institutional investors pursuant to which China Precision Steel agreed to issue and sell an aggregate of 7,100,000 shares of its common stock at a purchase price of $6.75 per share and an aggregate of 1,420,000 warrants to purchase its common stock, for gross proceeds of $47,925,000. Approximately $18 million of the net proceeds, after payment of fees and expenses related to the offering, will be used to purchase a new hydrogen annealing furnace and a new 1700 mm cold roll mill, approximately $22 million will be used to repay certain existing bank debt, and the balance will be available for general corporate purposes.
Dilution will do that to a stock.
Douglas A. McIntyre
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