Newalta Inc.

October 06, 2009 15:36 ET

Newalta Announces $40 Million Bought Deal Equity Financing

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


Newalta Inc. ("Newalta") (TSX:NAL) today announced it has entered into an agreement with a syndicate of underwriters (the "Underwriters") co-led by CIBC and Canaccord Capital Corporation to sell 5,250,000 shares on a bought deal basis at a price of $7.65 per share to raise gross proceeds of $40 million. Newalta has also granted the Underwriters the option to purchase up to an additional 787,500 shares, exercisable in whole or in part for a period of 30 days from closing of the offering to cover over-allotments and for market stabilization purposes, if necessary. The net proceeds of the offering will be used by Newalta to reduce indebtedness, contribute to funding of customer-driven capital projects and for general corporate purposes.

"In the quarters ahead, we will continue to tightly manage costs, build on the competitive advantages that we have in our key growth areas and capitalize on investment opportunities as our markets recover. Over the next few months we will finalize and begin to execute our 2010 capital spending plan. Due to the long lead times for equipment delivery and project execution, we will also be making commitments on our investments for the second half of next year. We will continue to pursue new technologies to further diversify our services and provide future growth for our business," said Al Cadotte, President and CEO of Newalta.

Newalta has applied to the Alberta Energy Resources Conservation Board ("ERCB") for the refund of $25 million in letters of credit, which are currently included in Newalta's funded senior debt. The ERCB anticipates returning the letters of credit to Newalta within 30 days.

Excluding the impact of the current financing and the refund of the letters of credit, management believes Newalta will be in compliance with its financial covenants under the Credit Facility for the third quarter of 2009.

"This financing plus the return of the letters of credit will provide greater than $63 million in additional financial capacity to strengthen and grow our business and to deliver superior returns to our investors," added Mr. Cadotte.

The offering will be made pursuant to a short form prospectus to be filed in each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, and New Brunswick. Closing is expected to occur on October 27, 2009, subject to regulatory approvals.

The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under applicable securities laws.

Newalta Inc. is Canada's largest industrial waste management and environmental services provider and focuses on maximizing the value inherent in industrial waste through the recovery of saleable products and recycling. It also provides environmentally sound disposal of solid, non-hazardous industrial waste. With talented people and a national network of facilities, Newalta serves customers in the automotive, construction, forestry, lead, manufacturing, mining, oil and gas, petrochemical, pulp and paper, refining, steel and transportation service industries. Providing solid investor returns, exceptional customer service, safe operations and environmental stewardship has enabled Newalta to expand into new service sectors and geographic markets. Newalta Inc. trades on the TSX as NAL. For more information, visit

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the size and anticipated closing date of the offering, the anticipated use of the net proceeds of the offering, the return of letters of credit to Newalta by the ERCB and compliance by Newalta of its financial covenants under the Credit Facility for the third quarter of 2009. Although Newalta believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Newalta 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 Newalta 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 by Newalta might change if the Board of Directors of Newalta determines that it would be in the best interests of Newalta to deploy the proceeds for some other purpose.

Although Newalta believes that it is eligible to receive the full refund of the letters of credit from the ERCB, there can be no assurance as to the exact amount to be retuned and the timing thereof.

The forward-looking statements contained in this press release are made as of the date hereof and Newalta undertakes no obligation 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.

Contact Information

  • Newalta Inc.
    Anne M. MacMicken
    Executive Director, Investor Relations
    (403) 806-7019