Gerdau Ameristeel Corp. has filed a preliminary short form prospectus with the securities regulatory authorities in all provinces and territories of Canada, and a registration statement on Form F-10 with the United States Securities and Exchange Commission, for a proposed offering in the United States and Canada of 70 million of its common shares.
Gerdau Ameristeel will use proceeds from the offering to finance the company's previously announced proposed acquisition of four North Star Steel long steel product mills and four downstream facilities from Cargill, Inc. Proceeds will also be used to fund capital expenditures and working capital and for general corporate purposes.
Gerdau SA, which currently* owns approximately 72% of Gerdau Ameristeel’s approximately 225 million outstanding common shares, will purchase 35 million of the 70 million common shares from Gerdau Ameristeel in the proposed offering.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and BMO Nesbitt Burns Inc. will act as joint book-running managers for a proposed public offering in the United States and Canada of the remaining 35 million common shares. CIBC World Markets Corp., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated will act as underwriters.
Gerdau Ameristeel has also granted to the underwriters an overallotment option to purchase up to an additional 5.25 million common shares within 30 days following the closing date. Gerdau SA has agreed to purchase an equivalent number of additional common shares to those purchased under the overallotment option within two days after any exercise by the underwriters of the overallotment option. The maximum aggregate number of additional common shares issuable to the underwriters and to Gerdau SA is thus 10.5 million. Final terms of this offering will be determined at the time of pricing.
A copy of the preliminary prospectus may be obtained by contacting Merrill Lynch in New York, N.Y., or in Toronto, Ont., Canada. The registration statement relating to the common shares has been filed with the United States Securities and Exchange Commission but has not yet become effective.
The common shares to be issued under this offering may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. Similarly, these common shares may not be sold in Canada until a receipt for a final prospectus is obtained. Gerdau Ameristeel cautions that this announcement does not constitute an offer to sell or the solicitation for an offer to buy, nor shall there be any sale of the common shares in any state, province, territory or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state, province, territory or jurisdiction.
*As of September 24, 2004.
Gerdau Ameristeel is the second-largest minimill steel producer in North America with annual manufacturing capacity of over 6.4 million tons of mill finished steel products. Through its vertically integrated network of 11 minimills (including one 50%-owned minimill), 13 scrap recycling facilities and 32 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern half of North America. The company's products are generally sold to steel service centers, fabricators, or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining and equipment manufacturing.