N/RRailpower announces $35 million investment by Ontario teachers' pension plan
MONTREAL, Nov. 9, 2007 (Canada NewsWire via COMTEX News Network) --
Railpower Technologies Corp. (TSX: P) announced today that one of Canada's most prominent and well respected institutional investors, Ontario Teachers' Pension Plan, has agreed to invest $35 million in Railpower. The private placement is expected to close in early January, 2008.
"We chose to invest in Railpower because of its market potential. We expect that increasingly stringent environmental regulations in North America and globally will open up new markets for Railpower's current and future emission-reducing products and technologies," said Mr. Brian Gibson, Senior Vice-President, Public Equities, Ontario Teachers' Pension Plan.
The private placement consists of the issuance of a convertible debenture which will have a maturity date of five years from its date of issuance and will have an interest rate of 5% per annum, payable semi-annually in either cash or common shares, at the discretion of Railpower. The initial principal amount of the debenture will be convertible, at the election of the holder, in whole or in part, into either common shares or a new class of convertible restricted voting shares to be created by the Corporation, or any combination thereof, at a conversion ratio of $0.30 per share, representing up to 116,666,667 shares. The new class of convertible restricted voting shares will be convertible into common shares, at the option of the holder, on a one-for-one, share for share basis (subject to customary adjustments, including for subdivision or consolidation).
The completion of the private placement is conditional upon the approval of regulatory authorities and the shareholders of the Corporation, the establishment by the Corporation of a working capital facility with a chartered bank or other financial institution on terms acceptable to Teachers, the closing of the private placement occurring on or before January 31, 2008, and other customary conditions.
Railpower will seek shareholder approval for the private placement and the creation of the new class of convertible restricted voting shares at a special meeting of shareholders. Railpower will shortly file with Canadian securities regulators and deliver to shareholders an information circular in connection with the special meeting of shareholders scheduled to occur on or about December 18, 2007.
The board of directors has unanimously determined that the private placement is in the best interests of the Corporation and is recommending that shareholders approve the private placement.
"With this investment, we now have a strong financial partner to ensure Railpower's future growth and success," said José Mathieu, President and Chief Executive Officer of Railpower Technologies. "We appreciate the confidence that Teachers demonstrated in our clean energy technology and its wordwide potential applications. This investment will solidify our base to better serve our current and future customers, by developing and bringing to the market new leading edge energy technologies that will meet and exceed their expectations".