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Press release from Marketwire

Canexus Income Fund Announces $60,000,000 Offering of 5.75% Convertible Unsecured Subordinated Debentures

Tuesday, June 14, 2011

Canexus Income Fund Announces $60,000,000 Offering of 5.75% Convertible Unsecured Subordinated Debentures16:18 EDT Tuesday, June 14, 2011CALGARY, ALBERTA--(Marketwire - June 14, 2011) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW. Canexus Income Fund ("Canexus" or the "Fund") (TSX:CUS.UN) announced today that it has reached an agreement with a syndicate of underwriters led by Scotia Capital Inc. and National Bank Financial Inc., pursuant to which the Fund will issue on a "bought-deal" basis 5.75% Convertible Unsecured Subordinated Debentures (the "Debentures") at a price of $1,000 per Debenture for total gross proceeds of $60,000,000 (the "Offering"). The Fund has granted to the underwriters an over-allotment option to purchase up to an additional $9,000,000 aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of up to and including 30 days following closing of the Offering, to cover over-allotments, if any and for market stabilization purposes.Net proceeds from the Offering will be used to repay existing indebtedness to position Canexus to continue to develop its ongoing suite of potential growth opportunities, and for general corporate purposes. The Debentures will bear interest from the date of issue at 5.75% per annum, payable semi-annually in arrears on December 31 and June 30 each year commencing December 31, 2011. The Debentures will have a maturity date of December 31, 2018 (the "Maturity Date"). The Debentures will be convertible into fully paid and non-assessable freely tradeable Trust Units 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 Fund for redemption of the Debentures at a conversion price of $11.35 per Trust Unit, being a conversion rate of 88.1057 Trust Units per $1,000 principal amount of Debentures. Holders converting their Debentures will receive accrued and unpaid interest thereon. As previously disclosed, the Fund intends to effect the previously approved conversion from a trust structure to a corporate structure on July 1, 2011. Upon the completion of the conversion, a newly formed corporation named Canexus Corporation will assume the obligations of the Fund in respect of the Debentures without any further notice to, or approvals of, the holders of the Debentures. The Debentures will thereafter be convertible into common shares of Canexus Corporation rather than Trust Units of the Fund while all other terms of the Debentures will remain substantially unchanged. 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 Fund. About CanexusCanexus 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 unitholder returns and delivers high-quality products to its customers. Canexus trust units (CUS.UN) and convertible debentures (Series I – CUS.DB; Series III – CUS.DB.A) trade on the Toronto Stock Exchange. More information about Canexus is available at Looking Statements This press release contains forwarding looking statements. More particularly, this press release contains statements concerning the closing of the Offering and the anticipated use of the net proceeds of the Offering. 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 Fund's Annual Information Form filed on the Fund's SEDAR profile at 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. The closing of the Offering could be delayed if Canexus is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the Offering might change if the Board of Directors of Canexus Limited determines that it would be in the best interests of the Fund to deploy the proceeds for some other purpose.The forward looking statements contained in this press release are made as of the date hereof and Canexus undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Gary KuberaCanexus LimitedPresident and CEO(403) 571-7300ORRichard McLellanCanexus LimitedSenior Vice President, Finance and CFO(403) 571-7300