Gainsco Files with SEC for Shareholder Rights Offering
Dallas-based insurance holding company Gainsco Inc. reported it has filed a registration statement with the Securities and Exchange Commission for a proposed rights offering to holders of its common stock.
Upon effectiveness of the registration statement, the company intends to distribute non-transferable subscription rights to purchase up to an aggregate of 4,535,000 shares of the company’s common stock to persons who own shares of common stock on Oct. 13, 2006, the record date. Each shareholder of record on the record date will receive .2222 of a subscription right for each share of common stock owned on the record date.
The company will not distribute any fractional rights, instead fractional subscription rights will be rounded up to the next largest whole number. Each whole subscription right entitles the holder to purchase one share of common stock at a purchase price of $4.00 per share. Shareholders who exercise their rights in full will also be entitled to purchase additional shares pursuant to an over-subscription right to the extent holders do not fully subscribe for their basic subscription rights.
Upon commencement of the rights offering, shareholders will be able to exercise their rights to purchase shares in the rights offering until the expiration date, which has not yet been determined. The company reserves the right to cancel or terminate the rights offering at any time prior to the expiration of the rights offering.
Gainsco intends to use the net proceeds of the offering, together with available funds, to make capital contributions to its subsidiary insurance companies which, if sufficient, will permit its insurance subsidiaries to maintain the present financial strength rating from A.M. Best, the principal rating agency of the insurance industry, and to support its continuing growth. However, the company cannot assure that these objectives will be achieved. Any remaining net proceeds will be used for working capital and general corporate purposes.
A registration statement relating to the shares of common stock underlying the rights has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
Source: Gainsco Inc.
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