A little debt reliefCAE announces proposed private placement of US$100M Senior Convertible Debentures
06:26 EST Wednesday, March 19, 2003
TORONTO, March 19 /CNW Telbec/ - (NYSE: CGT; TSX: CAE) - CAE today announced that it intends to raise approximately US$100 million (approximately C$150M) gross proceeds through an offering on a private placement basis in the United States and Canada of 20-year Senior Convertible Debentures (Debentures). CAE may raise up to an additional US$25 million upon exercise of an over-allotment option in connection with the offering. The Debentures will be unsecured obligations of CAE and will be convertible into common shares of CAE under certain circumstances, including the market price of CAE's common shares reaching a specified threshold.
The transaction is expected to close on or about March 25, 2003. The Company intends to use the net proceeds of the offering to reduce amounts owing under its credit facilities.
The Debentures provide cash interest payments at a variable rate based on three-month LIBOR plus between 0.25% and 0.75% per annum during the first five years from issuance, with the principal value of the Debentures increasing daily thereafter by the same variable rate, but limited to a maximum annual rate between 3% and 4% (to be determined). The Debentures may be redeemed at CAE's option for cash or common shares at the accreted value anytime after five years. Debenture holders may require CAE to purchase all or a portion of their Debentures at approximately five year intervals following the date of issue.
The Debentures can be converted into a fixed number of CAE common shares at a premium to current share price, provided that specific conditions are met. At CAE's option, any conversions, redemptions or purchases of Debentures can be satisfied by delivering cash and/or common shares.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities. The offering is being made only to qualified institutional buyers. Neither the Debentures nor the common shares issuable upon conversion of the Debentures have been registered under the US Securities Act of 1993 (the "Securities Act"), Canadian provincial securities legislation or any other securities laws. Neither the Debentures nor the common shares issuable upon conversion of the Debentures may be offered or sold in the United States, Canada or any other jurisdiction where such registration is required and has not been effected, except in a transaction not subject to, or exempt from, the registration requirements of the Securities Act, prospectus requirements of Canadian provincial securities legislation and similar requirements of any other applicable securities laws.
CAE is a global leader in providing advanced simulation and controls equipment and integrated training solutions for customers in the civil aviation, military and marine markets. With annual revenues in excess of $1 billion, CAE employs more than 6,000 people in Canada, the United States and around the globe.