Jipangu ups Cambior stake

Jipangu, already its largest shareholder, has purchased more than 6.1 million shares of Cambior (CBJ-T) from Sprott Canadian Equity Fund, Sprott Hedge Fund, Eric Sprott and Sprott Securities.

At a purchase price of 83 per share, the deal, which is exempt from the take-over bid requirements of the Ontario Securities Act, generated nearly $5.1 million in gross proceeds.

Once a previously announced private placement transaction with Cambior closes, Jipangu will own just lees than 39.7 million Cambior shares or about 37.8% of the company’s total shares outstanding. The company will also have nearly 5 million purchase warrants, which if fully exercised would further boost the Japanese company’s interest to 40.6%.

Under a previous agreement, Jipangu agreed not to acquire more than 45% of Cambior’s shares. The company also agreed to either tender its shares to a third-party cash takeover bid that is recommended by Cambior’s board or make a superior offer, and, in certain circumstances to effect a disposition or sale of its shares in Cambior through an underwritten secondary offering.

In a separate deal, Jipangu issued to Sprott Securities $10 million principal amount of redeemable convertible debentures to accounts managed by it. The three-year debentures bear interest payable at 7%, with the first interest payment at twelve months and thereafter semi-annually. Jipangu has pledged $12.5 million worth of Cambior’s shares as security. The convertible debentures are convertible into Cambior shares at 91 apiece for two years from the issue date. The debentures can also be converted into Jipangu shares at 200,000 ($2,506) at any time.