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Keystone Announces Subscription Rights Offering

10/04/2007 - Keystone Consolidated Industries has filed a preliminary registration statement that would allow Keystone's common stockholders to purchase an aggregate of 2,500,000 shares of Keystone's common stock for a purchase price of $10.00 per share.

Keystone Consolidated Industries, Inc. has filed a preliminary registration statement on Form S-3 with the Securities and Exchange Commission (SEC) for a distribution of non-transferable subscription rights to Keystone's common stockholders to purchase an aggregate of 2,500,000 shares of Keystone's common stock for a purchase price of $10.00 per share, or an aggregate of $25,000,000.
 
Following the SEC’s declaration that the registration statement is effective under the Securities Act of 1933, as amended, Keystone plans to distribute 0.25 of a subscription right for each share of common stock held on a record date to be determined. Each whole subscription right will entitle the record holder of common stock to purchase one share of Keystone's common stock at a subscription price of $10.00.
 
Keystone currently expects the subscription rights to be exercisable for a period of approximately 30 days.
 
Completion of distribution of the subscription rights is subject to, among other things, an amendment to Keystone's Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Keystone's common stock. Such amendment will be put to a vote of Keystone's common stockholders at a special meeting on a date to be determined. In connection with the special meeting, Keystone has also filed a preliminary proxy statement with the SEC.
 
Keystone says it will use net proceeds from the sale of common stock to reduce indebtedness under its revolving credit facility ($50.8 million balance outstanding at August 31, 2007), which in turn will create additional availability under that facility that could be used for general corporate purposes, including scheduled debt payments, capital expenditures, potential acquisitions or the liquidity needs of Keystone's current operations.
 
The company notes that this announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities, and that there shall be no sale of securities by Keystone in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Any offer regarding the subscription rights offering will be made only through a separate prospectus.