CDC is selling its share holding in Falconbridge

Dome Mines, (with 24%), emerges the dominant shareholder of Falconbridge Ltd. as the result of the sale by the Canada Development Corporation of the CDC’s 10.5 million common share holding in Falconbridge.

The CDC sold the shares, representing its 18% direct stake in the big nickel company, to underwriters Wood Gundy, Dominion Securities Pitfield, McLeod Young Weir, Merrill Lynch Canada and Gordon Capital Corp.

The investment houses plan to resell seven million of those shares immediately, and the remainder on or before Dec 31 next year. It would give CDC $136 million on closing, and another $69 million by 1987 year-end.

The deal involves an unusual instalment plan, in which investors will buy units, each containing one Falconbridge share and one-half of a deferred payment right, essentially a warrant and to be traded separately.

An initial amount of $20.25 per unit, consists of $19.25 for one common share (at presstime, Falconbridge shares were trading at $18.75), and $1 for the one-half deferred payment right.

One whole right will entitle the holder to buy one Falconbridge common share for $19.75 on or before Dec 31, 1987.

Anthony Hampson, CDC deputy chairman, says despite the Falconbridge share sale, which is intended to help reduce CDC debt, the company will continue to hold $271 million of convertible debentures.