Canyon Services Group Inc.
TSX : FRC

Canyon Services Group Inc.

October 06, 2009 10:06 ET

Canyon Services Group Inc. Increases Financing to $50.0 Miilion

CALGARY, ALBERTA--(Marketwire - Oct. 6, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Canyon Services Group Inc. ("Canyon" or the "Company") (TSX:FRC) is pleased to announce that the Company has reached an agreement with a syndicate of underwriters led by Cormark Securities Inc. (the "Underwriters") in respect of its bought deal announced on October 6, 2009 to increase the total size of the offering to $50.0 million. Under the agreement, the syndicate will now purchase on a "bought deal" basis from Canyon 10.0 million common shares of Canyon ("Common Shares") at an issue price of $2.00 per Common Share (the "Bought Deal Offering") in addition to the 15.0 million Common Shares to be issued to the ARC Energy Fund 6 (the "ARC Fund") on an underwritten private placement basis at an issue price of $2.00 per Common Share (the "Private Placement") for gross proceeds to Canyon of approximately $50.0 million.

Proceeds of the Bought Deal Offering and Private Placement will be used to fund the Company's capital program, to temporarily reduce bank indebtedness and for general corporate purposes.

Pursuant to the Bought Deal Offering, the Common Shares will be offered in all provinces of Canada (except Quebec) by way of a short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration requirements pursuant to Rule 144A and/or Regulation D of the United States Securities Act of 1933.

Closing of the Bought Deal Offering and Private Placement is expected to occur concurrently on or about October 28, 2009 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and, if required, shareholder approval as well as the execution of definitive documentation regarding the Private Placement. The Underwriters shall be entitled to terminate the Bought Deal Offering if the Private Placement shall not have closed prior to or concurrently with the Bought Deal Offering.

ADVISORY: This press release contains forward- looking statements which may include statements concerning the closing date of the offering, the anticipated use of the net proceeds of the offering, expanded capital program and debt reduction. Although Canyon believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Canyon 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 Canyon 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 any proposed acquisition or offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the offering by Canyon might change if the board of directors of Canyon determines that it would be in the best interests of Canyon 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 Canyon 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.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Corporation within the United States. The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws. Accordingly, the Common Shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration is available.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Canyon Services Group Inc.
    Brad Fedora
    President
    (403) 290-2491
    or
    Canyon Services Group Inc.
    Barry O'Brien
    Vice President, Finance and CFO
    (403) 290-2478