Allen-Vanguard ups size of greenshoe associated with C$10 million private placement

By Sheri Kasprzak

New York, Sept. 1 - Allen-Vanguard Corp. has increased the over-allotment option included with its previously announced C$10 million private placement.

A syndicate of placement agents led by Paradigm Capital Inc. and including Loewen, Ondaatje, McCutcheon Ltd. and Versant Partners Inc. will now have the option to sell up to 1,142,857 additional subscription receipts at C$1.75 each. The over-allotment option is exercisable up to two days before the deal closes.

The terms of the offering itself include up to 5,714,286 subscription receipts at C$1.75 each. The receipts are exchangeable for one unit of one share and one half-share warrant once the company successfully renegotiates certain covenants of credit facilities totaling C$16 million with the Bank of Scotland.

Certain insiders of the company have agreed to invest up to C$2.25 million for the receipt offering.

The offering was first announced Aug. 18 as a C$7 million deal of 4 million receipts but was increased to the current size on Aug. 22.

The deal is scheduled to close Sept. 15.

Proceeds will be used for working capital and to strengthen the company's balance sheet.

Based in Ottawa, Allen-Vanguard develops tools and training procedures for minimizing the effects of hazardous materials or devices.

On Thursday, the company's stock closed unchanged at C$1.696.

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