Northern Financial Announces Private Placement and Term Loan11 July 2006
Northern Financial Corporation (TSX: NFC) ("Northern" or the "Company") today announced a proposed private placement of common shares.
The Company intends to complete a private placement of common shares at $1.42 per share for gross proceeds of approximately $1,000,000. At the Company's option, the private placement may be increased to gross proceeds of up to $1,500,000. Employees of the Company may participate in the private placement. The primary use of proceeds will be an investment of working capital in the Company's wholly-owned subsidiary Northern Securities Inc. ("Northern Securities").
Completion of the private placement is subject to final approval by the Toronto Stock Exchange. The private placement is expected to close in one or more closings in July 2006.
Northern also announced that it has arranged an increase of $1,000,000 in its secured term loan to a total of $3,500,000. The total term loan is for a period of eighteen months and bears interest at a rate of 13%. The lender also has the ability to earn participation of a maximum of $150,000 during the 18 month term if the Northern share price exceeds $2.08. The proceeds will be used to fund Northern's merchant banking activities as well as being used as additional working capital in Northern and Northern Securities. Closing of the transaction is expected within two weeks.
Northern Financial Corporation wholly owns Northern Securities, a full service investment dealer that provides financial advisory services to retail and institutional clients and investment banking services to small capitalization companies.
For further information: Ann Krallisch, Director, Business Development, Northern Securities Inc., (416) 644-8113, Fax: (416) 644-0270, e-mail: akrallisch@northernsi.com
Source: newswire
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