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Fri Feb 27, 2004
Pan American Silver Intends to Make an Offer to Encourage Early Conversion of Outstanding Debentures
February 27, 2004 -- Vancouver, British Columbia -- PAN AMERICAN SILVER CORP. (NASDAQ: PAAS; TSX: PAA) announced today that it intends to make an offer to encourage early conversion by holders of the Company's US$86.25 million outstanding principal amount of 5.25% convertible debentures due July 31, 2009 (the "Debentures"). At present, Pan American can only force conversion of the Debentures after a three year no-forced-conversion term, which expires on July 31 2006. During the remainder of this term, interest in the amount of US $131.25 per US$1,000 principal amount of Debentures would be payable to the holders. Pan American will offer such amount of interest in cash plus common shares having a value equal to US$40 per US$1,000 principal amount of Debentures converted early, based on the closing market price of Pan American's common shares on the Nasdaq market on the date the formal offer is made. Assuming early conversion of all outstanding Debentures pursuant to the offer, Pan American's total cash payment would be approximately US$11.32 million and common shares having a value of US$3.45 million would be issued. The offer will be subject to regulatory approvals.
Pan American expects to make a formal offer to its Debenture holders prior to the end of March. Precise details of the formal offer will be set out in a future press release. The offer will be open for 30 days and will not be subject to any minimum amount of debentures being converted.
Investors holding approximately 50% of the outstanding principal amount of Debentures have indicated that they would be amenable to the conversion of their Debentures upon a formal offer being made. Pan American will make no payment in respect of the conversion of any Debentures prior to the issuance of its formal offer.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
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For Further Information Contact:
Brenda Radies, VP Corporate Relations
(604) 684-1175. |
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