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   Name - Welton Energy Corp

    Website -

    Symbol - WLT.RT

    Cusip Number - 950456 12 9

    Expiry Date - Feb. 24, 2006

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Welton Energy rights offering

 

2006-01-24 17:24 MT - Rights Offering

TSX bulletin 2006-0059

 

Rights symbol:  WLT.RT

Cusip for rights:  950456 12 9

Shareholder entitlement:  One right for each common share held on the record date

Terms of the rights:  3,667 rights entitle the holder to purchase an 8-per-cent secured convertible debenture in the principal amount of $1,000 at a price of $1,000.

Expiry time:  4:30 p.m. (Calgary time) Feb. 24, 2006

Ex rights date:  Jan. 26, 2006

Record date:  Jan. 30, 2006

Designated market-maker:  W.D. Latimer Co. Ltd.

 

Holders of common shares of record as of the close on Jan. 30, 2006, will be granted the right to purchase a debenture for every 3,667 rights held on such record date at a purchase price of $1,000. The rights will expire at 4:30 p.m. (Calgary time) on Feb. 24, 2006. The common shares of the corporation will commence trading on an ex rights basis at the open on Jan. 26, 2006, at which time the rights will be posted for trading on a when-issued basis. Refer to the corporation's prospectus dated Jan. 17, 2006, for details regarding the terms of the debentures. The Toronto Stock Exchange has conditionally approved the listing of the debentures. A further bulletin will be published if and when the debentures are to be listed.

Attention is directed to the fact that this offering of rights and debentures has not been and will not be registered in the United States. Accordingly, the debentures are not being offered to persons whose addresses of record are in the U.S. or any territory or possession thereof or any other jurisdiction outside the provinces of Canada (such persons being referred to herein as ineligible shareholders).

Rights certificates in respect of ineligible shareholders will be issued to and held by Valiant Trust Co. for the benefit of ineligible shareholders. The subscription agent will hold the rights until Feb. 15, 2006 (nine days before the expiry date), in order to give ineligible shareholders an opportunity to prove to the satisfaction of the corporation that they are residents of a qualified jurisdiction or that the issue of debentures pursuant to the exercise of rights will not be in violation of the laws of the applicable jurisdiction. Following such date, the subscription agent, for the account of ineligible shareholders, will, prior to the expiry time, attempt to sell the rights allocable to such ineligible shareholders and evidenced by rights certificates in the possession of the subscription agent on such date or dates and at such price or prices as the subscription agent shall determine in its sole discretion. Neither the corporation nor the subscription agent will be subject to any liability for the failure to sell any rights of ineligible shareholders or as a result of the sale of any rights at a particular price or on a particular day. No charge will be made for the sale of such rights by the subscription agent except for a proportionate share of any brokerage commissions incurred by the subscription agent and the costs of or incurred by the subscription agent in connection with the sale of the rights. Ineligible shareholders will not be entitled to instruct the subscription agent in respect of the price or the time at which the rights are to be sold. The subscription agent will endeavour to effect sales of rights on the open market and any proceeds received by the subscription agent with respect to the sale of rights net of brokerage fees and costs incurred and, if applicable, of the Canadian tax required to be withheld, will be divided on a pro rata basis among such ineligible shareholders and delivered by mailing cheques (in Canadian funds) of the subscription agent therefor as soon as practicable to such ineligible shareholders at their addresses recorded on the books of the corporation. Amounts of less than $1.00 will not be remitted. The subscription agent will act in its capacity as agent of the rightsholders on a best-efforts basis only and the corporation and the subscription agent do not accept responsibility for the price obtained on the sale or the inability to sell the rights on behalf of any ineligible shareholders. Holders of a rights certificate may purchase debentures by completing Form 1 of the rights certificate and mailing or delivering the rights certificate so completed together with payment of $1,000 per debenture to the subscription agent at its principal office in Calgary or its co-agent, BNY Trust Co. of Canada in Toronto so as to be received there prior to the expiry time.

No fractional debentures will be issued.

Each holder of a rights certificate who has fully exercised all of its rights will be entitled to subscribe for additional debentures, if available, at a price of $1,000 per debenture. If the total number of debentures subscribed for under this additional subscription privilege exceeds the number of debentures available, the available debentures will be allotted on a pro rata basis. The additional subscription privilege can be exercised by completing Form 2 of the rights certificate. Payment for additional debentures with respect thereto must accompany the rights certificate. The completion of Form 2 constitutes a binding commitment to subscribe for the additional number of debentures specified.

It is anticipated that the rights offering prospectus and rights certificates will be mailed to shareholders on or about Feb. 2, 2006.

The corporation has not retained the services of any security dealer or broker to solicit subscriptions for the debentures and will not pay any fee or commission for soliciting such subscriptions. Pursuant to a standby commitment dated Sept. 2, 2005, Brompton Financial Ltd. has agreed, subject to certain conditions, to purchase any debentures issuable pursuant to the exercise of rights not acquired by other rightsholders under the basic subscription privilege or the additional subscription privilege.

Trading and settlement rules

 

Trade dates             Settlement dates

Feb. 21, 2006            Feb. 23, 2006

Feb. 22, 2006, and 
Feb. 23, 2006            Cash next day

Feb. 24, 2006            Cash same day

 

 

1. All trades on Feb. 21, 2006, will be for special settlement on Feb. 23, 2006. These trades will appear on the CDS (Canadian Depository for Securities) settlement report and will be recorded with a settlement date of Feb. 23, 2006.

2. All trades on Feb. 22, 2006, and Feb. 23, 2006, will trade for cash settlement the following business day. Trades on Feb. 24, 2006, from the open to noon will be for same-day cash settlement.

3. Selling participating organizations must have the rights that are being sold in their possession or owed to them through clearing prior to such sale.

4. Should fail positions exist on the expiry date, purchasing participating organizations have the option of paying for the rights purchased and demanding delivery of the securities into which the rights are exercisable. Reference should be made to Rule 5-303. Such demand shall be made before 4 p.m. (Toronto time) on the expiry date of Feb. 24, 2006.

 

Investors should contact their broker for information or advice on their investment