Canada’s Manitoba Telecom Services (MTS) is raising C$249m (US$238m) after agreeing a bought deal with a syndicate of underwriters led by CIBC and Scotiabank.
The banks have agreed to buy 8.9 million new shares in the telco, which they will then sell…
Canada’s Manitoba Telecom Services (MTS) is raising C$249m (US$238m) after agreeing a bought deal with a syndicate of underwriters led by CIBC and Scotiabank.
The banks have agreed to buy 8.9 million new shares in the telco, which they will then sell on to the public.
The sale was upsized from an initial C$200m (US$191m). The publicly-traded company plans to use the C$238m (US$228m) net proceeds to fund its pension deficit and therefore eliminate its solvency payments until 2016.
A C$520m (US$497m) sale of its fibre optic network operator Allstream, which would have part-funded the shortfall, to telecoms veteran Naguib Sawiris was blocked by Ottawa last month.
The regional telco is selling its stock to the syndicate at C$28.10 (US$26.9) per common share, a 2.6% discount to MTS’ opening share price of C$28.85 (US$27.6) yesterday. Trading in the company was halted following the announcement.
Since the Allstream disposal collapsed, due to national security concerns, MTS shares have been trading around 10% lower than they were. In its Q3 release, MTS focused on potential growth areas for Allstream, which it began to strategically review in 2012.
The equity offering is set to close on 6 December.
