Aecon Group Inc.
TSX : ARE

Aecon Group Inc.

September 08, 2009 08:05 ET

Aecon Announces $150 Million Public Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Sept. 8, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Aecon Group Inc. (TSX:ARE) today announced that it has entered into an agreement with a syndicate of underwriters co-led by GMP Securities L.P. and TD Securities Inc., and including Raymond James Ltd., CIBC, Paradigm Capital Inc., BMO Capital Markets, Canaccord Capital Corporation, National Bank Financial Inc., Genuity Capital Markets and Macquarie Capital Markets Canada Ltd. pursuant to which the underwriters will purchase $150 million principal amount of convertible unsecured subordinated debentures at a price of $1,000 per debenture. Aecon has also granted the underwriters an over-allotment option to purchase up to an additional $22.5 million aggregate principal amount of debentures for a period of 30 days following closing to cover over-allotments.

The convertible debentures will mature on September 30, 2014 and will accrue interest at the rate of 7.0% per annum payable on a semi-annual basis. At the holder's option, the convertible debentures may be converted into common shares in the capital of Aecon Group Inc. at any time up to the maturity date. The conversion price will be $19.00 for each common share, subject to adjustment in certain circumstances.

The convertible debentures will be direct, unsecured obligations of Aecon Group Inc., subordinated to other indebtedness of the Company for borrowed money and ranking equally with all other unsecured subordinated indebtedness.

The convertible debentures will not be redeemable before September 30, 2012. From September 30, 2012 through the maturity date, Aecon may, at its option, redeem the convertible debentures, in whole or in part, at par plus accrued and unpaid interest provided that the weighted average trading price of the common shares on the Toronto Stock Exchange during a specified period prior to redemption is not less than 125% of the conversion price.

Aecon will use the net proceeds of the offering for general corporate purposes, including working capital investment in new project opportunities, and to further improve its liquidity in support of the surety capacity that may be required for these projects.

"Aecon's pipeline of work in the bid/negotiation process is as strong as we have seen in many years," said Scott Balfour, President and CFO, Aecon Group Inc. "This flexible and cost effective financing will help to ensure that we are in a position to continue to capitalize on the significant growth and project opportunities before us."

The offering is scheduled to close on or about September 29, 2009 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada. The securities 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 such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

Aecon Group Inc. is Canada's largest, publicly traded construction and infrastructure development company. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and on a selected basis internationally. Aecon is pleased to be recognized as one of the 10 Best Employers in Canada as published by Report on Business Magazine, as well as one of the Top 100 Employers in Canada as published in Maclean's Magazine.

The information in this news release may include certain forward-looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties which are generally described in Section 3.2 "Risk Factors" in Aecon's Annual Information Form dated March 30, 2009 available on SEDAR at www.sedar.com. Although Aecon believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct.

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