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Press release from CNW Group

New Flyer completes offering of convertible unsecured subordinated debentures

Tuesday, June 05, 2012

New Flyer completes offering of convertible unsecured subordinated debentures10:46 EDT Tuesday, June 05, 2012/Not for distribution to U.S. news wire services or dissemination in the United States./WINNIPEG, MB, June 5, 2012 /CNW/ - New Flyer Industries Inc. ("New Flyer" or the "Company") (TSX:NFI; TSX:NFI.UN; TSX:NFI.DB.U) announced today the successful completion of its previously announced public offering in Canada of US$65 million aggregate principal amount of 6.25% convertible unsecured subordinated debentures due June 30, 2017 (the "Debentures"). The Debentures were sold under a short form prospectus dated May 29, 2012, which is available on the Company's SEDAR profile at www.sedar.com.New Flyer anticipates that commencing today, the Debentures issued will be posted for trading on the Toronto Stock Exchange ("TSX") under the symbol "NFI.DB.U".The offering was made through a syndicate of underwriters led by BMO Capital Markets and CIBC World Markets Inc. The Company has granted the underwriters the option to purchase up to US$9.75 million principal amount of additional Debentures at a price of US$1,000 per Debenture to cover over-allotments, exercisable in whole or in part anytime up to 30 days following closing of the offering.The net proceeds from the offering, after deducting the underwriters' fee and the estimated expenses of the offering, will be used to redeem (or otherwise repurchase) all of the approximate C$59 million aggregate principal amount of 14% subordinated notes of New Flyer Industries Canada ULC ("NFI ULC") held by third parties (including those held in the form of an income deposit security ("IDS") and those held separately) (collectively, the "Subordinated Notes"), to pay the associated redemption premium and accrued interest and for general corporate purposes. NFI ULC intends to provide notice of redemption of the Subordinated Notes in due course, with redemption expected to occur on or about August 20, 2012. As the Subordinated Notes are denominated and redeemable in Canadian dollars, the Company will today convert the US dollar proceeds of the offering into Canadian dollars.Following the redemption of the Subordinated Notes, New Flyer intends to apply to de-list the IDSs (which currently consist of one common share of New Flyer and C$55.30 principal amount of Subordinated Notes per IDS and trade on the TSX under the symbol "NFI.UN") from the TSX and, following such de-listing, the common shares forming part of an IDS will commence trading separately and continue to be listed (together with the current separately-traded common shares) on the TSX under the trading symbol "NFI".Glenn Asham, New Flyer's Chief Financial Officer, commented that "We set out in 2011 to change from an IDS structure to a traditional common share structure to provide greater financial flexibility to pursue strategic growth and diversification opportunities as well as other benefits.  The non-cash rights offering of last summer was the first step.  We look forward to completing the process and delivering in full on the structure change upon the redemption of the Subordinated Notes in August."As previously disclosed, after the expected redemption of the Subordinated Notes in August 2012, the Company expects to establish a new dividend policy that will reduce the annualized dividend payment to approximately 50% of the previous annual IDS distribution level of C$1.17 per IDS.In addition, New Flyer expects to shortly enter into an amendment to its senior credit facility which will change certain of the covenants effective on the redemption of the Subordinated Notes. The covenant changes are intended to reflect the Company's new capital structure following the issuance of the Debentures and the redemption of the Subordinated Notes. A copy of the amendment will be filed on SEDAR in due course at www.sedar.com.The securities offered have not been 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. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.About New FlyerNew Flyer is the leading manufacturer of heavy-duty transit buses in Canada and the United States. The Company's three manufacturing facilities - in Winnipeg, MB; St. Cloud, MN; and Crookston, MN - are all ISO 9001, ISO 14001 and OHSAS 18001 certified. The Company currently operates a parts fabrication facility in Elkhart, IN and four parts distribution centers in Winnipeg, MB; Erlanger, KY; Fresno, CA and Brampton, ON.With a skilled workforce of over 2,000 employees, New Flyer is a technology leader, offering the broadest product line in the industry, including drive systems powered by clean diesel, LNG, CNG and electric trolley as well as energy-efficient diesel-electric hybrid vehicles. New Flyer has delivered over 31,000 heavy-duty buses in Canada and the United States.  All products are supported with an industry-leading, comprehensive parts and service network.Further information is available on New Flyer's web site at www.newflyer.com.The common shares and income deposit securities of New Flyer are traded on the Toronto Stock Exchange under the symbols NFI and NFI.UN, respectively.Forward-Looking StatementsThis press release contains forward-looking statements relating to expected future events and financial and operating results of New Flyer and NFI ULC that involve risks and uncertainties.  The words "believes", "anticipates", "plans", "expects", "intends", "projects", "estimates" and similar expressions are intended to identify forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including the ability to use the proceeds of the offering as described in this press release, market and general economic conditions and economic conditions of and funding availability for customers to purchase buses and to exercise options for buses and to purchase parts or services, the covenants contained in NFI ULC's senior credit facility (and the anticipated amendment of the credit facility) and subordinated note indenture could impact the ability of New Flyer to continue to fund distributions and dividends and take certain other actions, the ability of New Flyer to successfully execute its strategic plans and maintain profitability and risks related to acquisitions and the other risks and uncertainties discussed in the materials filed with the Canadian securities regulatory authorities and available on SEDAR at www.sedar.com. Due to the potential impact of these factors, New Flyer and NFI ULC disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.For further information: Glenn Asham Chief Financial Officer Tel: (204) 224-1251 E-mail: investor@newflyer.com