OPTI Canada Inc.
TSX : OPC

OPTI Canada Inc.
The Goldman Sachs Group, Inc.
NYSE : GS

The Goldman Sachs Group, Inc.

March 02, 2007 18:12 ET

OPTI Canada Inc. and The Goldman Sachs Group, Inc.: Early Warning Report and Press Release

NEW YORK, NEW YORK--(CCNMatthews - March 2, 2007) - OPTI Canada Inc. (TSX:OPC) and The Goldman Sachs Group, Inc. (NYSE:GS):

EARLY WARNING REPORT AND PRESS RELEASE

Report Pursuant to

SECTION 111 OF THE SECURITIES ACT (BRITISH COLUMBIA)

SECTION 176 OF THE SECURITIES ACT (ALBERTA)

SECTION 110 OF THE SECURITIES ACT, 1988 (SASKATCHEWAN)

SECTION 92 FOF THE SECURITIES ACT (MANITOBA)

SECTION 101 OF THE SECURITIES ACT (ONTARIO)

SECTION 147.11 OF THE SECURITIES ACT (QUEBEC)

SECTION 107 OF THE SECURITIES ACT (NOVA SCOTIA)

SECTION 102 OF THE SECURITIES ACT (NEWFOUNDLAND)

SECTION 126 OF THE SECURITIES ACT (NEW BRUNSWICK)

NATIONAL INSTRUMENT 62-103



1. Name and address of the offeror

The Goldman Sachs Group, Inc. ("GS Group"),
85 Broad Street, New York, NY, 10004

Goldman Sachs Canada Inc. ("GS Canada"),
Sun Life Tower, 150 King Street West, Suite 1201,
Toronto, Ontario M5H 1J9


GS Group and GS Canada are hereinafter referred to collectively as the "Offeror".

2. The designation and number or principal amount of securities and the offeror's securityholding percentage in the class of securities of which the offeror acquired ownership or control in the transaction or occurrence giving rise to the obligation to file the news release, and whether it was ownership or control that was acquired in those circumstances.

On February 28, 2007 the Offeror entered into an agreement assuming obligations under a previously issued call obligation agreement (the "Call Obligation Agreement") in favour of OPTI Canada Inc. ("OPTI"). OPTI can exercise the Call Obligation Agreement to require the Offeror to purchase, at the election of the Offeror, $67,500,000 of either (a) Series B Convertible Preferred Shares of OPTI; or (b) Common Shares of OPTI ("Common Shares"), at a subscription price of $2.20 per share (as adjusted) at any time until the earlier of: (i) Project completion (as that term is defined in OPTI's credit agreement or any replacement credit agreement); and (ii) June 30, 2008, provided that the funds received on such exercise are required by OPTI to meet bona fide obligations incurred or to be incurred in connection with OPTI's Long Lake Project (not including the repayment of any obligations owing under the credit facility). The Call Obligation Agreement provides that all exercises of Call Obligations, in whole or in part, will be made on a pro rata basis among the holders of Call Obligations based on the number of Call Obligations held by each holder in relation to the funding obligation.

Assuming OPTI were to exercise the Call Obligation Agreement and the Offeror were to elect to receive Common Shares, the Common Shares issuable upon exercise of the Call Obligation Agreement represent approximately 15.1% of the issued and outstanding Common Shares on a partially diluted basis (where the Common Shares issuable on the exercise of the Call Obligation Agreement are deemed to be outstanding Common Shares of OPTI, but no other Common Shares issuable on the exercise of other Call Obligations or other convertible securities held by persons other than the Offeror are deemed to be outstanding). Pursuant to applicable securities laws, the Offeror acquired deemed beneficial ownership of the securities underlying the Call Obligation Agreement.

Assuming OPTI were to exercise the Call Obligation Agreement and the Offeror were to elect to receive Series B Convertible Preferred Shares of OPTI, the Series B Convertible Preferred Shares of OPTI issuable upon exercise of the Call Obligation Agreement would represent approximately 100% of the issued and outstanding Series B Convertible Preferred Shares of OPTI on a partially diluted basis (where the Series B Convertible Preferred Shares of OPTI issuable on the exercise of the Call Obligation Agreement are deemed to be outstanding, but no other Series B Convertible Preferred Shares of OPTI issuable on the exercise of other Call Obligations or other convertible securities held by persons other than the Offeror are deemed to be outstanding). Pursuant to applicable securities laws, the Offeror acquired deemed beneficial ownership of the securities underlying the Call Obligation Agreement.

3. The designation and number or principal amount of securities and the offeror's securityholding percentage in the class of securities immediately after the transaction or occurrence giving rise to the obligation to file a news release.

After giving effect to the deemed beneficial ownership described in item 2 above, (i) the Offeror owned and controlled 189,264 Common Shares; and (ii) would be deemed to beneficially own 30,681,818 Common Shares, in the aggregate representing approximately 15.18% of the issued and outstanding Common Shares on a partially diluted basis (i.e. where the Common Shares issuable on the exercise of the Call Obligation Agreement are deemed to be outstanding Common Shares of OPTI, but no other Common Shares issuable on the exercise of other Call Obligations or other convertible securities held by persons other than the Offeror are deemed to be outstanding).

4. The designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in paragraph 3 over which:

(i) the offeror, either alone or together with joint actors, has ownership and control,

After giving effect to the deemed beneficial ownership described in item 2 above, (i) the Offeror owned and controlled 189,264 Common Shares; and (ii) would be deemed to beneficially own 30,681,818 Common Shares, in the aggregate representing approximately 15.18% of the issued and outstanding Common Shares on a partially diluted basis (i.e. where the Common Shares issuable on the exercise of the Call Obligation Agreement are deemed to be outstanding Common Shares of OPTI, but no other Common Shares issuable on the exercise of other Call Obligations or other convertible securities held by persons other than the Offeror are deemed to be outstanding).

(ii) the offeror, either alone or together with joint actors, has ownership but control is held by other persons or companies other than the offeror or any joint actor.

Not applicable.

(iii) the offeror, either alone or together with joint actors, has exclusive or shared control but does not have ownership.

Not applicable.

5. The name of the market in which the transaction or occurrence that gave rise to the news release took place.

The obligations of the Offeror under the Call Obligation Agreement were assumed pursuant to a private agreement dated February 28, 2007.

6. The purpose of the offeror and any joint actors in effecting the transaction or occurrence that gave rise to the news release, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer.

The obligations under the Call Obligation Agreement were entered into in the ordinary course of the Offeror's investment activities. The Offeror may purchase or sell securities of OPTI in the future on the open market or in private transactions, depending on market conditions and other factors material to the Offeror's investment decisions.

7. The general nature and the material terms of any agreement, other than lending arrangements, with respect to securities of the reporting issuer, entered into by the offeror, or any joint actor, and the issuer of the securities or any other entity in connection with the transaction or occurrence giving rise to the news release, including agreements with respect to the acquisition, holding, disposition or voting of any securities.

Not applicable.

8. The names of any joint actors in connection with the disclosure required by this form.

The securities being reported on by GS Group, as a parent holding company, are owned, or may be deemed to be beneficially owned, by GS Canada. GS Canada is a wholly-owned subsidiary of GS Group.

In accordance with Section 5.1 of National Instrument 62-103 (the "National Instrument"), this filing reflects the securities beneficially owned or controlled by certain business units of The Goldman Sachs Group, Inc. and its subsidiaries and affiliates (collectively, "GSG") which include business units engaged in principal investing activities, managing discretionary accounts and customer facilitation trading (collectively, the "Goldman Sachs Reporting Unit"). This filing does not reflect securities, if any, beneficially owned or controlled by any business units of GSG whose beneficial ownership of or control over securities is disaggregated from that of the Goldman Sachs Reporting Unit in accordance with the National Instrument.

The Goldman Sachs Reporting Unit disclaims beneficial ownership of the securities beneficially owned by (i) any client accounts with respect to which the Goldman Sachs Reporting Unit or its employees have voting or investment discretion, or both and (ii) certain investment entities of which the Goldman Sachs Reporting Unit acts as the general partner, managing general partner or other manager, to the extent interests in such entities are held by persons other than the Goldman Sachs Reporting Unit.

9. In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value of the consideration paid by the offeror.

Not applicable.

10. If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 in respect of the reporting issuer's securities.

Not applicable.

DATED March 2, 2007

Contact Information

  • The Goldman Sachs Group, Inc.
    Yvette Kosic
    Vice President
    (212) 902-7695