Russel Metals Inc.
TSX : RUS

Russel Metals Inc.

September 21, 2009 08:02 ET

Russel Metals Announces $150 Million Public Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Sept. 21, 2009) -

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Russel Metals Inc. (TSX:RUS) today announced that it has entered into an agreement with a syndicate of underwriters co-led by GMP Securities L.P. and RBC Capital Markets and including, Scotia Capital Inc. and TD Securities Inc., pursuant to which the underwriters will purchase $150 million principal amount of convertible unsecured subordinated debentures at a price of $1,000 per debenture.

The convertible debentures will mature on September 30, 2016 and will accrue interest at the rate of 7.75% per annum payable on a semi-annual basis. At the holder's option, the convertible debentures may be converted into common shares of Russel Metals at any time up to the maturity date. The conversion price will be $25.75 for each common share, subject to adjustment in certain circumstances.

The convertible debentures will be direct, unsecured obligations of Russel Metals, 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, 2015. From September 30, 2015 through the maturity date, Russel Metals may, at its option, redeem the convertible debentures, in whole or in part, at par plus accrued and unpaid interest.

Subject to specified conditions, Russel Metals will have the right to repay the outstanding principal amount of the convertible debentures, on maturity or redemption, through the issuance of common shares of the Company. Russel Metals will also have the option to satisfy its obligation to pay interest through the issuance and sale of common shares of the Company. Additionally, Russel Metals will have the option, subject to prior agreement of the holders, to settle its obligations on conversion by way of a cash payment of equal value.

Russel Metals will use the net proceeds of the offering for working capital, potential acquisitions and general corporate purposes.

The offering is scheduled to close on or about October 8, 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 by September 25, 2009 with the 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 registrations 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.

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec Industries, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.

This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Russel Metals, or developments in Russel Metals' business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Russel Metals cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, the expected use of proceeds of the offering and the expected closing date of the offering. The risks and uncertainties that may affect forward-looking statements include, among others: economic market conditions; and other risks detailed from time to time in Russel Metals' filings with Canadian provincial securities regulators. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and, except as required by law, Russel Metals does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

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