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Press release from Marketwire

Canexus Corporation Announces Offering of Approximately $100 Million of Common Shares for Ongoing Development of Unit Train Capabilities at Its North American Terminal Operations

Monday, May 13, 2013

Canexus Corporation Announces Offering of Approximately $100 Million of Common Shares for Ongoing Development of Unit Train Capabilities at Its North American Terminal Operations

16:25 EDT Monday, May 13, 2013

CALGARY, ALBERTA--(Marketwired - May 13, 2013) -

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 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, Scotiabank and National Bank Financial Inc., under which the underwriters have agreed to purchase from Canexus and sell to the public 11,840,000 common shares of the Corporation ("Common Shares") at a purchase price of $8.45 per Common Share (the "Offering Price"), for gross proceeds of $100,048,000 (the "Offering"). Canexus has also granted the underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to a further 1,776,000 Common Shares at the Offering Price, solely to cover their over-allocation position, if any. The Over-allotment Option will be exercisable in whole or in part, at the sole discretion of the underwriters, at any time until and including 30 days following the closing of the Offering. If the Over-Allotment Option is exercised in full, the gross proceeds raised pursuant to the Offering will be $115,055,200.

The net proceeds of the Offering will be used for the ongoing development of unit train capabilities at the Corporation's North American Terminal Operations ("NATO") at Bruderheim, Alberta.

In December, Canexus announced the expansion of NATO to include pipeline connected unit train operations. The Corporation also announced that formal agreement had been reached with MEG Energy Corp. ("MEG") to connect the Canexus Bruderheim terminal ("Bruderheim" or "Bruderheim terminal") with pipelines which interconnect with the MEG Energy Stonefell Terminal, and to provide terminalling services to MEG for the loading of bitumen blend for transport by rail and the receiving of diluent shipments by rail. The Corporation is making solid progress on this project and expects to commission this expansion late in the third quarter of 2013. Significant progress is also being made on both a potential second pipeline/terminal connection to Bruderheim and on contract negotiations with strategic customers for unit train shipments from Bruderheim under multi-year, take-or-pay terms. Contracts currently in negotiation for unit train shipments, if completed, will exceed the capacity of the initial phase of development. This project was designed to readily accommodate staged expansion of the rail loading infrastructure and the loop tracks to be able to load two unit trains simultaneously and more efficiently stage inbound and outbound unit trains, to increase capacity of the Bruderheim terminal from 7 to 13 unit trains per week. The capacity expansion is ready to proceed upon receiving sufficient customer commitment and could be operational by mid-2014. If this next stage of expansion is approved, it would bring the total estimated cost of the pipeline connected unit train facility to approximately $190 million through mid-2014.

"The market fundamentals for oil-by-rail movements are solid and we are making excellent progress in establishing strategic long-term relationships with both producers and with end-use customers unlikely to be served by major pipelines," said Mr. Gary Kubera, President and Chief Executive Officer. "As we discussed in our May 8, 2013 news release, Canexus continues to expect to deliver record Cash Operating Profit in the second half of the year despite a challenging start to 2013. With the potential for further expansion of our Bruderheim terminal to increase unit train capacity, this offering of common shares allows us to maintain a strong balance sheet."

Dividends are currently payable on a quarterly basis at an annual rate of $0.5472 per common share.

The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. Pursuant to the Offering, the Common Shares 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.

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. Canexus common shares (CUS) and debentures (Series I - CUS.DB; Series III - CUS.DB.A; Series IV - CUS.DB.B) trade on the Toronto Stock Exchange. More information about Canexus is available at www.canexus.ca.

Forward 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 as well as statements concerning anticipated cash operating profit for the second half of 2013, expectations for the interconnection of the Bruderheim terminal with nearby bitumen blend pipelines and diluent pipelines, the build out of rail infrastructure, the progress of a potential second pipeline/terminal connection and contract negotiations for additional unit train shipments, loading/offloading capacity and above ground tank storage and the initial and expanded capacity, cost expectations and timing for completion of the Bruderheim terminal and such expansion. 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.

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 determines that it would be in the best interests of the Corporation 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:

Contact Information:
Canexus Corporation
Gary Kubera
President and CEO
(403) 571-7300


Canexus Corporation
Richard McLellan
CFO
(403) 571-7300
www.canexus.ca

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