/Not for distribution to U.S. news wire services or dissemination in the
WINNIPEG, MB, June 5, 2012 /CNW/ - New Flyer Industries Inc. ("New
Flyer" or the "Company") (TSX:NFI; TSX:NFI.UN; TSX:NFI.DB.U) announced
today the successful completion of its previously announced public
offering in Canada of US$65 million aggregate principal amount of 6.25%
convertible unsecured subordinated debentures due June 30, 2017 (the
"Debentures"). The Debentures were sold under a short form prospectus
dated May 29, 2012, which is available on the Company's SEDAR profile
New Flyer anticipates that commencing today, the Debentures issued will
be posted for trading on the Toronto Stock Exchange ("TSX") under the
The offering was made through a syndicate of underwriters led by BMO
Capital Markets and CIBC World Markets Inc. The Company has granted the
underwriters the option to purchase up to US$9.75 million principal
amount of additional Debentures at a price of US$1,000 per Debenture to
cover over-allotments, exercisable in whole or in part anytime up to 30
days following closing of the offering.
The net proceeds from the offering, after deducting the underwriters'
fee and the estimated expenses of the offering, will be used to redeem
(or otherwise repurchase) all of the approximate C$59 million aggregate
principal amount of 14% subordinated notes of New Flyer Industries
Canada ULC ("NFI ULC") held by third parties (including those held in
the form of an income deposit security ("IDS") and those held
separately) (collectively, the "Subordinated Notes"), to pay the
associated redemption premium and accrued interest and for general
corporate purposes. NFI ULC intends to provide notice of redemption of
the Subordinated Notes in due course, with redemption expected to occur
on or about August 20, 2012. As the Subordinated Notes are denominated
and redeemable in Canadian dollars, the Company will today convert the
US dollar proceeds of the offering into Canadian dollars.
Following the redemption of the Subordinated Notes, New Flyer intends to
apply to de-list the IDSs (which currently consist of one common share
of New Flyer and C$55.30 principal amount of Subordinated Notes per IDS
and trade on the TSX under the symbol "NFI.UN") from the TSX and,
following such de-listing, the common shares forming part of an IDS
will commence trading separately and continue to be listed (together
with the current separately-traded common shares) on the TSX under the
trading symbol "NFI".
Glenn Asham, New Flyer's Chief Financial Officer, commented that "We set
out in 2011 to change from an IDS structure to a traditional common
share structure to provide greater financial flexibility to pursue
strategic growth and diversification opportunities as well as other
benefits. The non-cash rights offering of last summer was the first
step. We look forward to completing the process and delivering in full
on the structure change upon the redemption of the Subordinated Notes
As previously disclosed, after the expected redemption of the
Subordinated Notes in August 2012, the Company expects to establish a
new dividend policy that will reduce the annualized dividend payment to
approximately 50% of the previous annual IDS distribution level of
C$1.17 per IDS.
In addition, New Flyer expects to shortly enter into an amendment to its
senior credit facility which will change certain of the covenants
effective on the redemption of the Subordinated Notes. The covenant
changes are intended to reflect the Company's new capital structure
following the issuance of the Debentures and the redemption of the
Subordinated Notes. A copy of the amendment will be filed on SEDAR in
due course at www.sedar.com.
The securities offered have not been 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 an 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.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in
Canada and the United States. The Company's three manufacturing
facilities - in Winnipeg, MB; St. Cloud, MN; and Crookston, MN - are
all ISO 9001, ISO 14001 and OHSAS 18001 certified. The Company
currently operates a parts fabrication facility in Elkhart, IN and four
parts distribution centers in Winnipeg, MB; Erlanger, KY; Fresno, CA
and Brampton, ON.
With a skilled workforce of over 2,000 employees, New Flyer is a
technology leader, offering the broadest product line in the industry,
including drive systems powered by clean diesel, LNG, CNG and electric
trolley as well as energy-efficient diesel-electric hybrid vehicles.
New Flyer has delivered over 31,000 heavy-duty buses in Canada and the
United States. All products are supported with an industry-leading,
comprehensive parts and service network.
Further information is available on New Flyer's web site at www.newflyer.com.
The common shares and income deposit securities of New Flyer are traded
on the Toronto Stock Exchange under the symbols NFI and NFI.UN,
This press release contains forward-looking statements relating to
expected future events and financial and operating results of New Flyer
and NFI ULC that involve risks and uncertainties. The words
"believes", "anticipates", "plans", "expects", "intends", "projects",
"estimates" and similar expressions are intended to identify
forward-looking statements. Although the forward-looking statements
contained in this press release are based upon what management believes
to be reasonable assumptions, investors cannot be assured that actual
results will be consistent with these forward-looking statements, and
the differences may be material. Actual results may differ materially
from management expectations as projected in such forward-looking
statements for a variety of reasons, including the ability to use the
proceeds of the offering as described in this press release, market and
general economic conditions and economic conditions of and funding
availability for customers to purchase buses and to exercise options
for buses and to purchase parts or services, the covenants contained in
NFI ULC's senior credit facility (and the anticipated amendment of the
credit facility) and subordinated note indenture could impact the
ability of New Flyer to continue to fund distributions and dividends
and take certain other actions, the ability of New Flyer to
successfully execute its strategic plans and maintain profitability and
risks related to acquisitions and the other risks and uncertainties
discussed in the materials filed with the Canadian securities
regulatory authorities and available on SEDAR at www.sedar.com. Due to the potential impact of these factors, New Flyer and NFI ULC
disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless required by applicable law.
SOURCE New Flyer Industries Inc.
For further information:
Chief Financial Officer
Tel: (204) 224-1251