Universal Energy Group Ltd.
TSX : UEG

Universal Energy Group Ltd.

September 12, 2007 15:28 ET

Universal Energy Group Ltd. Announces $90 Million Convertible Unsecured Subordinated Debenture Offering

TORONTO, ONTARIO--(Marketwire - Sept. 12, 2007) -

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

Universal Energy Group Ltd. ("Universal Energy Group" or the "Company") (TSX:UEG) today announced that it has entered into an agreement for a $90.0 million bought deal offering of convertible unsecured subordinated debentures (the "Debentures") with a syndicate of underwriters led by National Bank Financial Inc. The underwriters have agreed to purchase $90.0 million of Debentures, due September 30, 2014 with a coupon rate of 6.00% per annum payable semi-annually on March 31 and September 30 commencing on March 31, 2008.

Each $1,000 principal amount of the Debentures will be convertible at any time prior to maturity or the date fixed for redemption, at the option of the holder, into approximately 41.67 common shares of Universal Energy Group representing a conversion price of $24.00 per common share.

The underwriters have been granted an over-allotment option by the Company, exercisable at any time up to 30 days following the closing of the offering, to purchase up to an additional $13.5 million of Debentures on the same terms and conditions, which would increase the offering to $103.5 million. The Debentures will be offered in all provinces and territories of Canada through a short form prospectus, and via private placement in the United States under Rule 144A. The offering is subject to normal regulatory approvals including approval of the Toronto Stock Exchange and is expected to close on or before October 2, 2007.

The net proceeds to Universal Energy Group will be used to provide an available source of funding for potential future acquisition opportunities in the retail energy business. In addition, a portion of the proceeds may also be used for general corporate purposes, including repayment of debt.

The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent registration or an exemption from the registration requirements. This release does 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 State in which such offer, solicitation or sale would be unlawful.

Universal Energy Group's common shares are listed on the Toronto Stock Exchange under the symbol "UEG". Universal Energy Group sells electricity and natural gas in Ontario and natural gas in British Columbia (through its subsidiary Universal Energy Corporation) to residential, small to mid-size commercial and small industrial customers and sells natural gas in Michigan (through its subsidiary Universal Gas & Electric Corporation) to residential, small to mid-size commercial and small industrial customers. Universal Energy Group (through its subsidiary Terra Grain Fuels Inc.) is constructing an ethanol facility near Belle Plaine, Saskatchewan that is designed to produce approximately 150 million litres of ethanol annually. Additional information about Universal Energy Group is available on SEDAR (www.sedar.com).

Statements made in this news release, other than those concerning historical financial information, should be considered forward-looking and are subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding the information currently available. The Company's actual results could differ materially from those expressed in the forward-looking statements. Factors that could cause results to vary include, among other things, those expressed in the Company's filings with Canadian securities regulatory authorities. All information presented herein should be read in conjunction with such filings.

Contact Information

  • Universal Energy Group Ltd.
    Stephen Plummer
    Chief Financial Officer
    (416) 673-1160
    Email: splummer@universalenergy.ca
    or
    Universal Energy Group Ltd.
    Shawn Dym
    Vice President, Business Development & Investor Relations
    (416) 673-4761
    Email: sdym@universalenergy.ca