Inco to redeem convertible preferreds, debentures

Inco (N-T is set to spend US$665 million exercising its right to redeem, on May 1, 2003, all of its outstanding 5.5% convertible series E preferred shares, plus all of its outstanding 5.75% convertible debentures due 2004.

For each series E share, Inco will pay US$51.10 plus all accrued and unpaid dividends up to the redemption date.

Series E shareholders may choose to convert their holdings into common Inco shares at a rate of 1.19474 common shares per series E share held prior to the redemption date. However, this currently represents an effective conversion price of US$41.85 per share, whereas common shares trade at just US$18.52 at presstime.

Based on the 9.44 million series E shares now issued and outstanding, Inco will be paying out about US$487 million for the redemption. This sum includes a US$10.4-million premium based on the US$50 issue price and US$4.3 million in accrued dividends.

Series E shares trade on the New York and Toronto Stock Exchanges. Inco has no other preferred shares outstanding.

Inco will pay another US$178 million to redeem its 5.75% convertible debentures due 2004, including about US$3.3 million in accrued interest.

The company will pay US$1,011.50 per US$1,000 in principal amount for each convertible debenture.

At the holder’s option, debentures may be converted into common Inco shares up until the close of business on April 28, 2003, at a conversion price of US$30, or about 33.33 common shares for each convertible debenture.



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