Noranda Completes Nexfor, Canadian Hunter Spin-Offs
Noranda Inc. has completed distribution of its interest in Nexfor Inc. (formerly Noranda Forest Inc.) and Canadian Hunter Exploration Ltd. This distribution represents the culmination of Noranda's strategy aimed at repositioning itself as an international multi-metal mining and metallurgical operating company.
As a result of the restructuring, common shareholders of Noranda became entitled to the following securities for each Noranda common share owned at the close of business yesterday: one new Noranda common share, 0.436 of a Nexfor Inc. common share, and 0.25 of a Canadian Hunter common share.
Existing share certificates representing Noranda common shares will continue to represent shares in the "new" Noranda. Share certificates representing ownership of Nexfor Inc. and Canadian Hunter common shares, together with a cash payment for any fractional share of Nexfor (based on a price of $6.1325/share), will be mailed to eligible Noranda Inc. common shareholders on or before January 8.
In general, a Canadian resident holder of Noranda Inc. common shares, who holds such shares as capital property, will not realize a capital gain or loss upon the receipt of these Nexfor and Canadian Hunter shares and any cash in lieu of a fractional Nexfor common share, unless the holder elects otherwise pursuant to the provisions of the Income Tax Act.
However, for tax purposes, shareholders are required to allocate the adjusted cost base of their Noranda common shares on Dec. 31, 1998, to their new Noranda, Nexfor, and Canadian Hunter common shares in proportion to the respective fair market values immediately after the arrangement.
The company believes that it is reasonable for common shareholders to allocate the adjusted cost base of their Noranda common shares on Dec. 31, 1998, as follows: 75% of that adjusted cost base to their new Noranda common shares, 14% to their Nexfor common shares, and 11% to their Canadian Hunter common shares. Shareholders other than Canadian residents are urged to consult their tax advisors with respect to the tax consequences of the arrangement, the receipt of distributed shares, and the payment for fractional interests.
Noranda, Nexfor, and Canadian Hunter will operate as separate, public companies. Noranda Inc. common shares trade under the symbol "NOR," and Nexfor common shares trade under the symbol "NF," on the Toronto, Montreal, and Vancouver stock exchanges. Canadian Hunter common shares trade under the symbol "HTR" on The Toronto Stock Exchange.
As a result of their ownership of Noranda common shares immediately prior to giving effect to the arrangement, EdperBrascan Corp. and associated companies have acquired, pursuant to the arrangement, 23,530,204 Canadian Hunter common shares (and thereby own in the aggregate approximately 40% of the outstanding Canadian Hunter common shares) and 41,036,674 Nexfor common shares. The aggregate number of Nexfor common shares held by EdperBrascan and associated companies after giving effect to the arrangement and related transactions is 47,403,974 (representing approximately 31% of the outstanding Nexfor common shares).