Westaim Corp. and Fairfax Financial Holdings Ltd. closed a transaction under which Fairfax Financial agreed to invest up to C$100 million in Westaim.
As part of the agreement, Westaim sold C$50 million preferred securities to Fairfax Financial and issued 28,571,430 common share purchase warrants, exercisable at C$3.50 per share.
Westaim has discretion until Jan. 1, 2018, to require Fairfax Financial to buy all or part of the remaining 5 million preferred securities, for up to C$50 million. The purchase needs to be completed not less than 20 business days after Westaim notifies Fairfax Financial.
Westaim will use the proceeds from the placement for potential acquisitions and general corporate purposes.
Fairfax Financial will have the right to nominate one director to the Westaim board as long as it owns, directly or indirectly, 5% of all outstanding Westaim common shares.
If the warrants are fully exercised, Fairfax Financial would own approximately 16.6% of the issued and outstanding Westaim common shares. If only the warrants which vested June 2 are exercised, Fairfax Financial would own 9.1% of the issued and outstanding common shares.