Central Fund of Canada Ltd. has entered into an underwriting agreement with CIBC World Markets Inc. to sell 11,540,000 Class A shares of the fund.
Central Fund said Tuesday that CIBC World Markets Inc., as underwriter, has been granted the right to increase the size of the offering by up to an additional 960,000 Class A Shares, exercisable in whole or in part, at any point prior to 16:00 ET on Jan. 27.
The offering will be made under a third prospectus supplement to Central Fund’s US$750 million base shelf prospectus dated March 31, 2008.
With a purchase price of US$10.40 per Class A Share, the offering is expected to result in gross proceeds of approximately US$120 million, prior to any over-allotment.
Substantially all the net proceeds of the offering have been committed to purchase gold and silver bullion for settlement at closing, Central Funds says. The additional capital raised by the offering is expected to assist in reducing the annual expense ratio in favour of the shareholders of the fund.
Closing is expected to occur on or about Feb. 3.
Calgary-based Central Fund is an exchange-tradeable, refined gold and silver bullion holding company. Shares the on the Toronto Stock Exchange (CEF.A and CEF.U) and the NYSE Alternext (CEF).
IE