11 June 2008capital raising announcement● NeutralMajor
On June 5, 2008 GeoResources agreed to sell 1,533,334 restricted shares at $22.50 each, plus five-year warrants for 613,336 shares at $32.43, to non-affiliated accredited investors for $34.5 million gross; the deal closed June 9, 2008. Wachovia Capital Markets, the placement agent, was paid about $1.7 million. The company must file a resale registration statement by July 9, 2008, and the warrants cannot be exercised until six months after closing. This adds new shares (and potential warrant shares), which dilutes existing holders; the filing does not state what the proceeds will be used for.
What it means for a shareholder
613,336 new shares at $32.43 to raise about $34.5m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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