Gerdau Ameristeel Prices Offering of Common Shares
11/05/2007 - Gerdau Ameristeel receives U.S. and Canadian regulatory approval of registration statement for its proposed offering of 110 million of its common shares.
Gerdau Ameristeel Corp. announced that its registration statement has become effective under the U.S. Securities Act of 1933, and that it has obtained a receipt for a final prospectus from the securities regulatory authorities in each of the provinces and territories of Canada regarding the proposed offering of 110 million of its common shares.
Gerdau SA currently owns approximately 66.5% of the outstanding common shares of Gerdau Ameristeel, and has agreed to purchase approximately 73 million of the common shares from Gerdau Ameristeel in the proposed offering. Immediately following closing of the offering, Gerdau SA will hold approximately 66.5% or 276.4 million common shares of Gerdau Ameristeel and intends to hold these common shares for investment purposes only.
Approximately 37 million common shares will be distributed to the public through an underwriting syndicate, at a price of US$12.25 per share in the U.S. and Canada. The total gross proceeds will be approximately US$1.35 billion.
Gerdau Ameristeel has granted the underwriters an option to purchase up to an additional 5,535,750 common shares at the public offering price (as adjusted, if applicable, for any dividends declared and payable on the common shares prior to the exercise of the option), less underwriting commission, within 30 days following the closing date (the overallotment option). Gerdau SA has agreed to purchase, within two days after exercise of the overallotment option, a number of additional common shares to maintain its approximate 66.5% ownership interest, at the public offering price (as adjusted, if applicable, for any dividends declared and payable on the common shares prior to the exercise of the option). If the overallotment option is exercised in full, total gross proceeds of the offering would be approximately US$1.55 billion.
The company said it will use net proceeds of the offering to partially repay the loans incurred for the previously announced acquisition of Chaparral Steel Co., which closed on September 14, 2007.
J.P. Morgan Securities Inc., CIBC World Markets Corp., ABN AMRO Rothschild LLC, and HSBC Securities (USA) Inc. are acting as joint book-running managers and Banc of America Securities LLC and BMO Capital Markets are acting as co-managers of the offering.
Gerdau Ameristeel is the second-largest minimill steel producer in North America with annual manufacturing capacity of approximately 11.7 million tons of mill finished steel products. Through its vertically integrated network of 19 minimills (including one 50%-owned joint venture minimill), 19 scrap recycling facilities and 62 downstream operations, Gerdau Ameristeel serves customers throughout the United States and Canada.
The company's products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers for use in a wide variety of industries.
Gerdau Group is the leader in the production of long steel products in the Americas and ranks as the 14th largest steelmaking company worldwide. It has approximately 35,000 employees and is present in thirteen countries: Argentina, Brazil, Canada, Chile, Colombia, Dominican Republic, India, Mexico, Peru, Spain, the United States, Uruguay and Venezuela. Gerdau Group has an annual installed capacity of more than 20 million tonnes of steel and is one of the largest recyclers in the Americas. With more than 100 years of history, it has taken a path of international growth in line with the steelmaking consolidation process.
