CALGARY, ALBERTA--(Marketwire - Nov. 29, 2012) -
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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 Scotia Capital Inc., under which the underwriters have agreed to purchase from Canexus and sell to the public 9,500,000 common shares of the Corporation ("Common Shares") at a purchase price of $7.90 per Common Share (the "Offering Price"), for gross proceeds of $75,050,000 (the "Offering"). Canexus has also granted the underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to a further 1,425,000 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, until 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 $86,307,500.
The net proceeds of the offering will be used for expansion of capabilities at the North American Terminal Operation ("NATO") at Bruderheim, Alberta and to fund other ongoing growth initiatives, including our hydrochloric acid expansions at North Vancouver.
The next phase of NATO expansion, is planned to connect the Canexus Bruderheim terminal ("Bruderheim" or "Bruderheim terminal") to nearby bitumen blend pipelines and diluent pipelines, and to build out the rail infrastructure, loading/offloading and above ground tank storage required to allow for unit train movement of up to 118 tank cars (approximately 70,000 barrel movements) in single trains daily. The cost of the project is expected to be approximately $125 million, inclusive of $45 million of pre-spending authorized by Canexus' Board of Directors to date for long lead items and other construction activities that are currently ongoing. If this next phase of NATO expansion receives full project approval in the coming months, these expanded capabilities should be operational in the third quarter of 2013.
"We are pleased to announce continued progress on the expansion of our Bruderheim terminal capabilities to include pipeline connected unit train operations for large scale movements of bitumen blend and diluent by rail," said Mr. Gary Kubera, President and Chief Executive Officer. "Sufficient progress on multiple potential pipeline/terminal connections and negotiations with customers for unit train shipments at Bruderheim under multi-year, take-or-pay terms, along with robust market drivers, gives us the confidence to continue to advance this project."
The Corporation expects this next phase of NATO expansion, if fully approved, to be accretive to all common shareholders after considering the Offering announced today. It also sets the stage for future incremental unit train capability, utilization of the existing 1.6 million barrels of salt cavern storage, development of additional salt cavern storage and pursuit of other attractive investment opportunities at this 480 acre site.
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.
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 expectations for the interconnection of the Bruderheim terminal with nearby bitumen blend pipelines and diluent pipelines, the build out of rail infrastructure, loading/offloading capacity and above ground tank storage and the initial capacity, cost expectations and timing for completion of the Bruderheim terminal. 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 Corporation 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.