this should take the pressure off, to make a bad deal on selling Nato or North Van.
The Debenture that is due on Dec.31 2015 is already taken care of. (See below)
So there is time for oil to make a rebound and get this ship moving in the right direction .
CALGARY, ALBERTA--(Marketwired - May 13, 2014) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Canexus Corporation (TSX:CUS) (the "Corporation" or "Canexus") today announced that it has entered into a "bought deal" financing agreement with a syndicate of underwriters led by CIBC, National Bank Financial Inc., Scotiabank and TD Securities Inc. under which the underwriters have agreed to purchase from Canexus and sell to the public 75,000 6.50% Series VI Convertible Unsecured Subordinated Debentures (the "Debentures") at a price of $1,000 per Debenture for total gross proceeds of $75,000,000 (the "Offering"). Canexus has also granted the underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to an additional aggregate principal amount of Debentures equal to the lesser of the underwriters' over-allocation position and $11,250,000 at the same price, exercisable in whole or in part, at the sole discretion of the underwriters, until 30 days following the closing of the Offering, to cover the underwriters' over-allocation position. If the Over-Allotment Option is exercised in full, the maximum gross proceeds raised pursuant to the Offering will be $86,250,000. The Offering is expected to close on June 3, 2014 and is subject to Canexus receiving all necessary regulatory approvals.
Canexus intends to use the net proceeds of the Offering initially to repay indebtedness under its credit facility which will then be available to be drawn as required to fund the repayment of the 5.75% Series III Convertible Unsecured Subordinated Debentures ("Series III Debentures") maturing December 31, 2015 (but redeemable at par after December 31, 2014, plus accrued and unpaid interest), and for working capital and/or general corporate purposes.
Richard McLellan, Senior Vice President Finance and Chief Financial Officer stated, "The Debenture issue strengthens Canexus' financial position, improves Canexus' existing debt repayment profile and provides enhanced financial flexibility."
The Debentures will bear interest from the date of issue at 6.50% per annum, payable semi-annually in arrears on June 30 and December 31 each year commencing December 31, 2014. The Debentures will have a maturity date of December 31, 2021 (the "Maturity Date").
The Debentures will be convertible into freely tradable common shares of Canexus (the "Common Shares") at the option of the holder at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by the Corporation for redemption of the Debentures at a conversion price of $6.50 per Common Share, being a conversion rate of 153.8462Common Shares per $1,000 principal amount of Debentures. Holders converting their Debentures will receive accrued and unpaid interest thereon.
Dividends are payable on the Common Shares on a quarterly basis. The most recent quarterly dividend of $0.10 per Common Share was declared on May 7, 2014 and is payable on July 15, 2014 to holders of record on June 30, 2014.
The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. Pursuant to the Offering, the Debentures will be offered in each of the provinces of Canada, other than the province of Quebec, by way of a short form prospectus, and by way of private placement in the United States to Qualified Institutional Buyers pursuant to Rule 144A under the United States Securities Act of 1933, as amended, and internationally as permitted by the Corporation.
Notice to Readers
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Corporation in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act of 1933 and other applicable securities laws.
About Canexus
Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Our four plants in Canada and two at one site in Brazil are reliable, low-cost, strategically-located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus also provides fee-for-service hydrocarbon transloading services to the oil and gas industry from its terminal at Bruderheim, Alberta. Canexus targets opportunities to maximize shareholder returns and delivers high-quality products to its customers and is committed to Responsible Care® through safe operating practices. Canexus common shares (CUS) and debentures (Series III - CUS.DB.A; Series IV - CUS.DB.B; Series V - CUS.DB.C) trade on the Toronto Stock Exchange. More information about Canexus is available at www.canexus.ca.
Forward-Looking Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the size and material terms of the Offering, the characteristics of the Debentures, the closing of the Offering and the anticipated use of the anticipated net proceeds of the Offering, the impact of the repayment of long-term indebtedness on Canexus' capital position, the repayment or redemption of the Series III Debentures and the payment of the next quarterly dividend on July 15, 2014 to holders of record on June 30, 2014. By their nature, forward-looking statements involve a variety of assumptions, known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements including market and general economic conditions, future costs, treatment under governmental regulatory, tax and environmental regimes and the other risks and uncertainties detailed under "Risk Factors" in the Corporation's Annual Information Form filed on the Corporation's SEDAR profile at www.sedar.com. Although Canexus believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Canexus can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.