Student Transportation Announces TSX's Approval of Renewal of Normal Course Issuer Bid

    TORONTO, Dec. 17 /CNW/ - Student Transportation of America Ltd. (TSX:
STB.UN) and Student Transportation of America ULC (collectively, "STA")
announced today that the Toronto Stock Exchange has approved the renewal of
its notice of intention to make a normal course issuer bid for a portion of
Income Participating Securities ("IPSs") as appropriate opportunities arise
from time to time. Each IPS represents one common share ("Common Shares")
(TSX: STB) of Student Transportation of America Ltd. and $3.847 principal
amount of 14% subordinated notes ("Notes") (TSX: STB.DB) of Student
Transportation of America ULC. STA's normal course issuer bid will be made in
accordance with the requirements of the exchange. STA may begin to purchase
IPSs on or about December 18, 2007. During the period from December 15, 2006
to December 14, 2007, STA purchased 116,800 IPSs at a weighted average price
of $10.13 per IPS.
    As of December 17, 2007, 11,350,461 IPSs were outstanding and the "public
float" was 6,712,311. Pursuant to the notice, STA is permitted to acquire up
to 400,000 IPSs in the 12-month period commencing December 18, 2007 and ending
on December 17, 2008, which figure represents 6% of the public float.
Potential purchases will be made by STA through the facilities of the Toronto
Stock Exchange and in accordance with applicable regulatory requirements. The
price which STA will pay for any IPSs will be the market price of such IPSs at
the time of acquisition. Pursuant to the Toronto Stock Exchange rules, the
maximum number of IPSs that may be repurchased during the same trading day is
3,918 IPSs, subject to STA's ability to make one block purchase per calendar
week which exceeds such limits. The IPSs, and the underlying Common Shares and
Notes, will be cancelled upon their purchase by STA. STA will fund the
purchases either through borrowings on its senior debt facility or out of
available cash. STA believes that the purchase by STA of a portion of
outstanding IPSs is an appropriate use of senior borrowing capacity and/or
available cash and is in the best interests of STA and its securityholders as
such purchases would lower the cost of funds related to the Common Shares and
Notes cancelled.
    "The renewal of the NCIB permits us to continue the opportunity to
acquire "Units" at what we believe is low market prices in relationship to our
value," said Denis J. Gallagher, Chairman & CEO.
    The notice of intention provides that no appraisal or valuation regarding
STA, its material assets or securities, has been prepared within the two years
preceding the date of the notice.
    To the knowledge of STA, no director, senior officer or other insider of
STA currently intends to sell any IPSs under the bid. However, sales by such
persons through the facilities of the TSX may occur if the personal
circumstances of any such person change or any such person makes a decision
unrelated to these normal course purchases. The benefits to any such person
whose IPSs are purchased would be the same as the benefits available to all
other securityholders whose IPSs are purchased.


    Student Transportation is the fourth-largest provider of school bus
transportation services in North America, conducting operations through local
operating subsidiaries. Student Transportation has become a leading school bus
transportation company by aggregating operations through the consolidation of
existing providers and conversion of in-house operations and currently
operates more than 5,000 school vehicles in North America. For more
information, please visit

    Forward-Looking Statements

    This news release contains "forward-looking statements" within the
meaning of applicable securities laws, which reflects the expectations of
management regarding Student Transportation of America Ltd.'s, Student
Transportation of America ULC's and Student Transportation of America
Holdings, Inc.'s (the "Company") results of operations, expense levels,
seasonality, cash flows, performance, liquidity, borrowing availability,
financial ratios, ability to execute the Company's growth strategy, cash
distributions and the number of IPSs to be purchased pursuant to the normal
course issuer bid. 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",
"could", "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.

For further information:

For further information: Denis J. Gallagher, Chairman and Chief
Executive Officer, Phone: (732) 280-4200, Fax: (732) 280-4213; Patrick J.
Walker, Chief Financial Officer, Phone: (732) 280-4200, Fax: (732) 280-4213;
Keith P. Engelbert, Director of Investor Relations, Phone: (732) 280-4200,
Fax: (732) 280-4213,

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