Cargojet Income Fund

Cargojet Income Fund

March 19, 2008 15:51 ET

Cargojet Income Fund Announces $31 Million Offering of Subordinated Unsecured Convertible Debentures

TORONTO, ONTARIO--(Marketwire - March 19, 2008) -


Cargojet Income Fund (the "Fund") (TSX:CJT.UN) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets under which the underwriters have agreed to purchase C$31,000,000 aggregate principal amount of Subordinated Unsecured Convertible Debentures due April 30, 2013 (the "Debentures"). The offering is scheduled to close on or about April 9, 2008. The Fund has granted the underwriters an option to purchase up to an additional C$4,650,000 aggregate principal amount of Debentures for a period of 30 days following closing of the offering.

The Debentures are subordinated, unsecured obligations of the Fund and will bear interest at a rate of 7.50% per annum, payable semi-annually in arrears on April 30 and October 31 of each year, commencing October 31, 2008. The Debentures are convertible at any time at the option of the holders into trust units at a conversion price of $16.00 per trust unit. The Debentures will mature on April 30, 2013.

The Fund intends to use the net proceeds of the Offering to finance the start-up costs for its previously announced wide body aircrafts program of approximately $12 million, finance the construction of a hangar for the wide body aircraft of approximately $9 million, finance the previously announced acquisition of 51% of Prince Edward Air, temporarily repay current indebtedness under the credit facility and for general corporate purposes.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada excluding Quebec. The offering is subject to customary regulatory approvals. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933 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 news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.

About Cargojet:

Cargojet is Canada's leading provider of time sensitive overnight air cargo services. Cargojet operates its network across North America transporting over 840,000 pounds of time sensitive air cargo each business night, utilizing a fleet of twenty all cargo aircraft.

Notice on Forward Looking Statements:

Certain statements contained herein constitute "forward-looking statements". Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," "indicates," "targeting," "suggests" and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The issuer assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.

Contact Information

  • Cargojet Income Fund
    P. Dhillon
    Vice President Marketing, Public & Government Relations
    (905) 501-7373