Student Transportation of America Ltd.
TSX : STB.UN
TSX : STB

Student Transportation of America Ltd.

March 21, 2007 09:48 ET

Student Transportation of America Ltd. Announces Common Share Offering

TORONTO, ONTARIO--(CCNMatthews - March 21, 2007) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Student Transportation of America Ltd. ("STA") announced today that it has entered into an engagement letter with Wellington West Capital Markets Inc. ("WWCM") in connection with a private placement on a best efforts basis (the "Offering") of 1,805,000 common shares (TSX:STB) at a price of $6.65 per common share for aggregate gross proceeds of approximately $12 million.

The common shares issued pursuant to the Offering will be subject to a four-month hold period, commencing at closing. The proceeds of the Offering will be used to repay debt that was drawn down on a temporary basis to repurchase a portion of the outstanding class B common shares of Student Transportation of America Holdings, Inc., (which shares had an escalating dividend).

In part, the Offering of common shares of STA (as opposed to IPSs (TSX:STB.UN)) is part of a longer-term strategy to create liquidity in the common shares. Each IPS unit consists of one common share of STA and C$3.847 principal amount of 14% subordinated debt of Student Transportation of America ULC. STA also announced today that it is contemplating a potential exchange offer whereby holders of IPSs would be offered an opportunity to exchange their IPSs for common shares. STA believes that the Canadian qualified dividend of the common share creates more favourable tax treatment for holders (compared to the IPSs) due to the enhanced tax credit on dividends. The consideration of any such exchange offer is in its preliminary stages and there can be no assurance that STA will determine that it is advisable to proceed with any such exchange offering or, even if STA determined it was advisable, that there would not be cost, timing, regulatory or tax issues that would make it impracticable.

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 APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS. THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

Profile

Student Transportation is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school transportation and management company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 4,000 school vehicles in North America. For more information, please visit www.sta-ips.com.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws, which reflects the expectations of management regarding the Issuer's and Company's results of operations, expense levels, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the Company's growth strategy and cash distributions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "track", "targeted", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes or events. These forward looking statements reflect the Company's current expectations regarding anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at which or by the performance or results will be achieved. A number of factors could cause our actual results to differ materially from the results discussed, expressed or implied in any forward-looking statement made by us or on our behalf, including, but not limited to, the factors discussed under "Risk Factors" in our Annual Information Form. These forward looking statements are made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information

  • Student Transportation of America Ltd.
    Denis J. Gallagher
    Chairman and Chief Executive Officer
    (732) 280-4200
    (732) 280-4213 (FAX)
    or
    Student Transportation of America Ltd.
    Keith P. Engelbert
    Director of Investor Relations
    (732) 280-4200
    (732) 280-4213 (FAX)
    Email: kengelbert@sta-ips.com
    or
    Student Transportation of America Ltd.
    Patrick J. Walker
    Chief Financial Officer
    (732) 280-4200
    (732) 280-4213 (FAX)