CALGARY, Feb. 8, 2012 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky") (TSX: RME)(TSX: RME.DB) announced today that it intends to make an offer (the "Offer") to purchase all of its 7.00% convertible unsecured subordinated
debentures due September 30, 2017 (the "Debentures") at a purchase price of $1,125 for each $1,000 principal amount of
Debentures (the "Offer Price"), representing a premium of $125 to the face value of the Debentures
per $1,000 principal amount. The Offer also represents a premium of
$55 to the closing price of $1,070 on the Toronto Stock Exchange ("TSX") on Wednesday, February 8, 2012, and a premium of approximately $49 to
the volume weighted average trading price of $1,076 on the TSX for the
30 trading days ended Wednesday, February 8, 2012, in each case per
$1,000 principal amount.
In connection with the Offer, Rocky also intends to hold a meeting (the
"Meeting") for holders of the Debentures ("Debentureholders") on or about March 23, 2012, in Calgary, Alberta, to consider and
approve amendments to the trust indenture governing the Debentures that
will permit Rocky to, within 30 days of the expiry of the Offer, redeem
any Debentures not tendered to the Offer at a redemption price equal to
the Offer Price (the "Redemption").
There is currently $31,500,000 aggregate principal amount of Debentures
outstanding. Assuming all of the Debentures are purchased pursuant to
the Offer and/or the Redemption, the aggregate purchase price to Rocky,
before costs and expenses of the Offer and Redemption and not including
accrued and unpaid interest payable on the Debentures, will be
$35,437,500, which Rocky intends to finance with available working
capital and the funds from an amended credit facility expected to be
provided by a syndicate of lenders.
Rocky's CEO, Matt Campbell, stated, "We believe that the Offer and
related Redemption will enhance shareholder value by reducing Rocky's
overall cost of financing by refinancing the Debentures with available
working capital and lower-cost bank debt."
Debentureholders who tender their Debentures to the Offer will receive
accrued and unpaid interest on such Debentures up to and including the
date the Debentures are taken up by Rocky under the Offer.
Debentureholders whose Debentures are redeemed pursuant to the
Redemption will receive accrued and unpaid interest up to and including
the date of redemption.
Full details of the Offer and Redemption are to be included in a
combined management proxy circular, offer to purchase and issuer bid
circular (the "Circular") that is anticipated to be sent to the registered holders of
Debentures on or about February 21, 2012. It is anticipated that the
Offer will be open for acceptance until March 30, 2012. The making of
the Offer and the Redemption is subject to Rocky securing an acceptable
amended credit facility and receipt of a formal valuation of the
Debentures in accordance with applicable regulatory requirements.
Certain members of Rocky's management, who hold an aggregate of $672,000
principal amount of Debentures, have indicated that they intend to vote
their Debentures in favour of the Redemption and deposit their
Debentures to the offer.
RBC Capital Markets is acting as financial advisor to Rocky and as
dealer manager in connection with the Offer and Redemption, with the
law firm of Burnet, Duckworth & Palmer LLP acting as Rocky's legal
About Rocky Mountain Dealerships Inc.
Rocky is one of Canada's largest agriculture and construction equipment
dealerships with 36 branches throughout Alberta, Saskatchewan and
Manitoba. Rocky sells, rents, and leases new and used construction and
agriculture equipment and offers product support and finance to its
Additional information on Rocky is available at www.rockymtn.com and on SEDAR at www.sedar.com.
This press release contains forward-looking statements. All statements
other than statements of historical fact contained in this press
release are forward-looking statements. You can identify many of these
statements by looking for words such as "believes", "expects", "will",
"intends", "projects", "anticipates", "estimates", "continues" or
similar words or the negative thereof. These forward-looking statements
include statements with respect to the making and timing of the Offer,
the amount of the Offer Price, the Redemption and the holding and
timing of the Meeting. There can be no assurance that the plans,
intentions or expectations upon which these forward-looking statements
are based will occur. Forward-looking statements are subject to risks,
uncertainties and assumptions, including, but not limited to, those
discussed elsewhere in this press release. There can be no assurance
that such expectations will prove to be correct. Some of the factors
that could affect future results and could cause results to differ
materially from those expressed in the forward-looking statements
contained herein include, but are not limited to, any delay or failure
to satisfy the conditions to the making of the Offer (including any
failure or delay of the Company to obtain the required financing or the
commitment to provide the required financing necessary to make the
Offer or to redeem Debentures in accordance with the Redemption) any
failure or delay in obtaining Debentureholder approval of the
Redemption, and the failure to satisfy any conditions to take up under
the Offer. The forward-looking statements contained herein are
expressly qualified in their entirety by this cautionary statement. The
forward-looking statements included in this press release are made as
of the date of this press release and Rocky assumes no obligation to
update or revise them to reflect new events or circumstances except as
expressly required by applicable securities law.
Rocky has not yet commenced the Offer referred to in this press release.
Upon the commencement of the Offer, it will file the Circular with the
provincial securities commissions in Canada. The Circular will contain
important information about the Offer and the Redemption and should be
read by Debentureholders. When the Offer is commenced, one will be able
to obtain the Circular and all other documents at no charge when they
become available on the system for electronic document analysis and
retrieval (SEDAR) at www.sedar.com. Accordingly, this announcement does not constitute or form part of any
offer or invitation to purchase, otherwise acquire, subscribe for,
sell, or otherwise dispose of, or any solicitation of any offer to
sell, otherwise dispose of, issue, purchase, otherwise acquire or
subscribe for, any security. The release, publication or distribution
of this announcement in certain jurisdictions may be restricted by law
and therefore persons in such jurisdictions into which this
announcement is released, published or distributed should inform
themselves about and observe such restrictions.
SOURCE Rocky Mountain Dealerships Inc.
For further information:
Rocky Mountain Dealerships Inc.
Matt Campbell, Chief Executive Officer; or
Garrett Ganden, Chief Operating Officer
#301, 3345 - 8th Street S.E.
Calgary, Alberta T2G 3A4
Telephone: (403) 265-7364, Fax (403) 214-5644