New Gold stock price allows redemption of 5% convertibles Nov. 20

By Toni Weeks

San Diego, Oct. 11 - New Gold Inc. said it will redeem its C$55 million of outstanding 5% subordinated convertible debentures due June 28, 2014 on Nov. 20, according to a press release.

Upon redemption, noteholders will receive, per C$1,000 principal amount, the number of common shares obtained by dividing the principal amount by 95% of the current market price on the redemption date. The current market price will be the weighted average trading price per share on the Toronto Stock Exchange for the 30 consecutive trading days ending five trading days before the redemption date. Accrued interest will be paid in cash.

The company said it is able to redeem the debentures early, because its share price has traded at a 25% premium to the C$9.35 per share conversion price for 30 days on a volume-weighted average basis.

Alternatively, holders may convert their debentures into common shares before 8 p.m. ET on Nov. 19 at a conversion price of C$9.35 per share. If all of the debentures are converted into common shares prior to redemption, New Gold will issue 5,882,352 shares in full satisfaction of the debentures.

As a result of the redemption, New Gold said it will not have to repay the debt in mid-2014 nor pay interest incurred between redemption and maturity.

New Gold is a Vancouver, B.C.-based mining company.

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