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(Note: All dollar amounts Canadian dollars unless otherwise noted)
TORONTO, March 10, 2017 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) ("Chemtrade" or the "Fund") announced today that it has completed its previously-announced acquisition (the "Transaction") of all of the issued and outstanding common shares of Canexus Corporation ("Canexus") by way of a court-approved plan of arrangement.
"We are very pleased to have completed this important acquisition and welcome all of our new employees. The Canexus businesses are an excellent strategic fit with Chemtrade's existing operations, adding significant size, scale and diversity to our product and service platform," said Chemtrade President and Chief Executive Officer, Mark Davis. "We are now one of the largest sodium chlorate suppliers in North America and have diversified our product portfolio with the addition of chlor-alkali products. In addition, our geographic reach and diversity is enhanced with operations in Brazil."
The all-cash Transaction was financed by a combination of: (i) US$1.05 billion syndicated senior secured credit facilities consisting of a US$325 million term loan and a US$725 million revolver with a US$200 million optional accordion (the "Credit Facilities"); and (ii) the net proceeds of an offering of 21.8 million subscription receipts (the "Subscription Receipts") that was completed on January 27, 2017 and raised aggregate gross proceeds of approximately $400 million (the "Offering"). In connection with the Transaction, a portion of Chemtrade's new Credit Facilities were used to repay its existing Credit Facilities. As a result of the Transaction, approximately US$492 million and C$28 million is outstanding under Chemtrade's Credit Facilities, excluding amounts payable, if any, in satisfaction of the change of control offers to be made to holders of outstanding Canexus convertible debentures and senior notes. As required by the indentures governing Canexus' outstanding indebtedness, Chemtrade will commence offers to acquire the Canexus convertible debentures and senior notes within 30 days.
With the closing of the Transaction the Subscription Receipts issued in the Offering have been exchanged on a one-for-one basis for units of Chemtrade without payment of additional consideration or further action, with the result that an aggregate of 21.8 million units have now been issued. Trading in the Subscription Receipts has been halted and will be cancelled and Chemtrade units issued on exchange of the Subscription Receipts have been listed on the TSX. An amount of $0.20 per Subscription Receipt equal to the amount per unit of cash distributions made by Chemtrade for which record dates occurred during the period that the Subscription Receipts were outstanding, net of any applicable withholding taxes, will be paid in respect of each Subscription Receipt.
Pursuant to the Transaction, common shares of Canexus have been converted into Class A redeemable common shares and are expected to be delisted from the TSX at the close of trading on March 13, 2017. Canexus (which will be renamed Chemtrade Electrochem Inc.) will remain a reporting issuer under applicable Canadian securities law for so long as its convertible debentures and senior notes remain outstanding.
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may", "will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: the anticipated effects on Chemtrade's business of the Canexus acquisition. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the "RISK FACTORS" section of the Fund's latest Annual Information Form and the "RISKS AND UNCERTAINTIES" section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: there being no significant disruptions affecting the operations of the Fund and its subsidiaries, whether due to labour disruptions, supply disruptions, power disruptions, transportation disruptions, damage to equipment or otherwise; the ability of the Fund to obtain products, raw materials, equipment, transportation, services and supplies in a timely manner to carry out its activities and at prices consistent with current levels or in line with the Fund's expectations; the timely receipt of required regulatory approvals; the cost of regulatory and environmental compliance being consistent with current levels or in line with the Fund's expectations; the ability of the Fund to successfully access tax losses and tax attributes; the ability of the Fund to obtain financing on acceptable terms; currency, exchange and interest rates being consistent with current levels or in line with the Fund's expectations; and global economic performance.
Except as required by law, the Fund does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund
For further information: Mark Davis, President and CEO, Tel: (416) 496-4176; Rohit Bhardwaj, Vice-President, Finance & CFO, Tel: (416) 496-4177