General Steel Holdings (General Steel), a leading non-state-owned steelmaker in China, has agreed with institutional investors to offer $25 million worth common shares, a press release by the company said on Thursday. The value of General Steel shares dropped more than 20 percent in New York Stock Exchange on Thursday following the news was publicized, international newswires reported.
General Steel said that it is going to offer 5.56 million common shares and, additionally, warrants to purchase up to 2.78 million more shares to institutional investors. The securities will be offered at a price of $4.50 per unit, each unit consisting of one common share and a two and one half year warrant to purchase half of an additional common share. The warrants have an exercise price of $5 per share and are exercisable commencing six months and one day after closing.
The funds will be used for "general corporate purposes which may include working capital, capital expenditures, acquisitions of new businesses and investments," the press release said.