The Keg Royalties Income Fund
TSX : KEG.UN

The Keg Royalties Income Fund

April 09, 2010 08:48 ET

The Keg Royalties Income Fund and Keg Restaurants Ltd. Announce Completion of a Bought Deal Offering of Units

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 9, 2010) -

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The Keg Royalties Income Fund (the "Fund") (TSX:KEG.UN) and Keg Restaurants Ltd. ("KRL") announced today that KRL has completed a secondary offering of units of the Fund (the "Offering") in connection with an agreement with a syndicate of underwriters led by National Bank Financial Inc. and including CIBC World Markets Inc. (collectively the "Underwriters"). The Underwriters purchased 900,000 units of the Fund ("Units") from KRL at a purchase price of $12.15 per Unit for gross proceeds of $10,935,000. The Offering was made pursuant to a short form prospectus filed with securities regulators in each of the provinces and territories of Canada other than the Province of Quebec.

Prior to closing of the Offering, KRL held 905,944 Class A general partner units, 1,826,700 Class B general partner units and 1,548,247 Class D general partner units of The Keg Rights Limited Partnership (together the "Exchangeable Units"), which were exchangeable for an aggregate of 4,280,891 Units of the Fund, representing a 30.61% indirect interest in the Fund on a fully diluted basis. KRL exchanged only the number of Exchangeable Units needed for the number of Units to be sold pursuant to the Offering. Following the closing of the Offering, KRL now beneficially owns an aggregate of 3,380,891 Exchangeable Units, representing an equivalent beneficial ownership of 3,380,891 Units, or approximately a 24.18% indirect interest in the Fund on a fully diluted basis. The Fund did not receive any proceeds from the Offering.

Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. Keg Restaurants Ltd. continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. The Keg has been named one of the "50 Best Employers in Canada" for the past eight years by the Globe and Mail's Report on Business Magazine. For information on our brand, visit www.kegsteakhouse.com.

Certain information in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance, achievements or transactions of the Fund, the Keg Rights Limited Partnership, KRL, to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking information. When used in this press release, such information uses words including "anticipate", "estimate", "may", "will", "expect", "believe", "plan" and other similar terminology. This information reflects current expectations regarding future events and operating performance and speak only as of the date of this press release. Such forward-looking information involves a number of risks, uncertainties and future expectations including, but not limited to the risks and uncertainties set out in the Fund's management's discussion and analysis for the year ended December 31, 2009 filed on SEDAR at www.sedar.com. Forward-looking information is made as of the date hereof and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.

The trustees of the Fund have approved the contents of this press release.

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