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26 December 2007


5N completes $34.5m IPO to fund German CdTe plant

High-purity metals and alloy producer 5N Plus Inc of Montreal, Québec, Canada has completed its initial public offering on the Toronto Stock Exchange at a price of $3.00 per share, yielding proceeds of $34.5m. In addition, in a parallel secondary offering, minority shareholder II-VI Inc of Saxonburg, PA, USA has sold its stake in 5N Plus for gross proceeds of $32m.

5N Plus was founded in June 2000 after developing electronic materials within Canadian natural resource company Noranda Inc (one of the world’s largest mining firms). It draws its name from the purity of its products (99.999%, or five nines, and above), which include metals such as tellurium, cadmium, selenium, and zinc. It also produces related II-VI and III-V compounds such as cadmium telluride (CdTe) and cadmium sulphide (CdS) as precursors for the growth of crystals for electronic applications, including infra-red detectors for night vision, for medical imaging detectors, thermoelectric modules, and thin-film photovoltaic cells. The firm is an integrated producer, with both primary and secondary refining capabilities, and also provides recycling services.

In the IPO, 5N Plus issued 10m common shares, for gross proceeds of $30m, plus 1.5m further shares following the exercise in full of an over-allotment option by the underwriters, for additional proceeds of $4.5m (totaling $34.5m from 11.5m shares).

The net proceeds will be used primarily to:

  • fund the construction of German subsidiary 5N PV GmbH’s 40,000 square-foot plant in Eisenhüttenstadt (announced in November, and to be operational in July 2008), which will boost capacity for CdTe production (particularly for First Solar Inc of Phoenix, AZ, USA, which also has a second solar module manufacturing plant in Frankfurt-an-der-Oder, Germany);
  • fund capital expenditure at its Montreal facility; and
  • repay the firm’s bank loan and a portion of its long-term debt.

The balance will be used for general corporate purposes and working capital.

On the first day of trading after the IPO and the secondary offering, about 7.7 million shares changed hands, raising the stock to over $5.20 per share.

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