Homeland Energy Announces Process of Rights Offering
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TORONTO, CANADA -- (Marketwire) -- 06/09/10 -- Homeland Energy Group Ltd. (TSX: HEG) ('Homeland' or the 'Company') wishes to advise shareholders on the process for participating in the Rights Offering previously announced June 2, 2010.
Each holder of record of Homeland common shares ('Common Shares') as of the close of business on June 9, 2010 will receive one right ('Right') for each Common Share held. A Shareholder will be entitled to acquire one additional Common Share at a price of $0.05 per Common Share (the 'Subscription Price') for every 1.7265 Rights held. For example, if a shareholder holds 100,000 Common Shares, he will receive 100,000 Rights and will have the right to subscribe for 57,920 Common Shares (the 'Basic Subscription Privilege').
The Rights will expire at 5:00 p.m. (Toronto time) on June 30, 2010 (the 'Expiry Time'). Holders of Rights who exercise their Rights in full will be entitled to purchase, at the Subscription Price, any Common Shares that are not otherwise subscribed for under the Basic Subscription Privilege prior to the Expiry Time (the 'Additional Subscription Privilege'). If subscriptions for Common Shares under the Additional Subscription Privilege exceed the total number of Common Shares available under the Rights Offering, Common Shares will be allocated on a pro rata basis to persons exercising the Additional Subscription Privilege.
To subscribe for Common Shares, a completed rights certificate, together with payment in full of the Subscription Price for each Common Share subscribed for (under both the Basic and the Additional Subscription Privilege), must be received by the subscription agent for the Rights Offering, Equity Transfer and Trust Company (the 'Subscription Agent'), prior to the Expiry Time.
The Rights Offering is available only to residents of Ontario, British Columbia and Alberta in Canada and residents of the United Kingdom. Rights certificates will not be mailed to holders of Common Shares resident outside of these jurisdictions ('Non-Qualifying Shareholders'). U.K. residents should contact their broker for additional instructions. Non-Qualifying Shareholders will be sent a letter advising them that their rights certificates will be issued to and held by the Subscription Agent, which will hold those Rights as agent for the benefit of all Non- Qualifying Shareholders.
The Rights and Common Shares issuable upon the exercise of the Rights have not been and will not be registered under the U.S. Securities Act and may not be offered or sold in the United States of America or any of its territories or possessions or to U.S. Persons. Accordingly, subscriptions will not be accepted from any security holder or transferee who is a U.S. person or resident in the United States of America, its territories or possessions, and no prospectus will be delivered to such persons.
Homeland will accept subscriptions from Non-Qualifying Shareholders, other than holders resident in the United States, if they satisfy the Subscription Agent and Homeland that such offering to and subscription by such holder or transferee is lawful and in compliance with all securities and other laws applicable in the jurisdiction where such holder or transferee is resident. A Non-Qualifying Shareholder in a jurisdiction other than the United States who meets these requirements and wishes to exercise Rights should contact Homeland as follows:
Catherine Beckett, Manager Corporate Affairs either by phone at 416-542-3994 or by email at cbeckett@homelandenergygroup.com
as soon as possible.
After June 23, 2010 the Subscription Agent will attempt, on a commercially reasonable basis, to sell the Rights of Non-Qualifying Shareholders (other than those shareholders from whom Homeland accepts subscriptions) over the facilities of the Toronto Stock Exchange. The Subscription Agent will mail cheques representing the net proceeds, without interest, from such sales.
As previously announced, GMR Energy Limited ('GMR') has agreed to provide a standby commitment under which it will purchase from the Company up to a maximum of 159,862,800 Common Shares not otherwise subscribed for under the Rights Offering prior to the Expiry Time.
The maximum proceeds under the Rights offering will be $8,750,000. The net proceeds under the offering will be used to repay the loan made by an affiliate of GMR of $7,993,140 and for working capital.
Further details concerning the Rights Offering and the procedures to be followed by holders of Common Shares are contained in the prospectus available on www.sedar.com.
Homeland Energy Group Ltd. (TSX: HEG) is a coal producer with operations in the Witbank area of South Africa. The company also has a large-scale development property in South Africa and exploration interests in Southern Africa. Homeland will continue to seek out interests in additional coal projects in South Africa and neighbouring countries as well as internationally. Homeland is a shareholder in Homeland Uranium Inc., a Canadian uranium exploration company focused on projects in Niger and the United States. Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol 'HEG' with 302,115,756 common shares issued and outstanding. www.homelandenergygroup.com.
Please visit www.homelandenergygroup.com
Contacts:
Homeland Energy Group Ltd.
Jeff Lowe
Acting Chief Financial Officer
1 416 506-1979
info@homelandenergygroup.com
www.homelandenergygroup.com