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(Note: All dollar amounts Canadian dollars unless otherwise noted)
TORONTO, Jan. 27, 2017 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN) ("Chemtrade" or the "Fund") announced today that it has completed its previously announced offering of subscription receipts (the "Subscription Receipts") (TSX: CHE.R) at a price of $18.35 per Subscription Receipt (the "Offering"). The Offering was undertaken on a bought deal basis by a syndicate of underwriters led by BMO Capital Markets. On closing, Chemtrade issued 21.8 million Subscription Receipts, resulting in aggregate gross proceeds of approximately $400 million.
As previously announced, the net proceeds of the Offering will be used to partially fund Chemtrade's previously announced acquisition of Canexus Corporation (TSX: CUS) ("Canexus") by way of a plan of arrangement (the "Arrangement"). Subject to the satisfaction of all conditions precedent set out in the arrangement agreement between an indirect, wholly-owned subsidiary of Chemtrade, Chemtrade Logistics Inc. and Canexus, including the approval of Canexus shareholders and the receipt of all necessary regulatory approvals, the Arrangement is expected to close in the first quarter of 2017. The proceeds of the Offering will be held by an escrow agent pending the fulfilment or waiver of all such conditions precedent.
On closing of the Arrangement, (i) one unit of the Fund will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder thereof; and (ii) an amount per Subscription Receipt equal to the amount per unit of any cash distribution made by Chemtrade for which record dates have occurred during the period that the Subscription Receipts are outstanding, net of any applicable withholding taxes, will become payable in respect of each Subscription Receipt.
If the Arrangement fails to close or is terminated, the proceeds of the Offering and the pro rata entitlement to interest earned or deemed to be earned thereon, net of any applicable withholding taxes, will be paid to holders of the Subscription Receipts and the Subscription Receipts will be cancelled.
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 nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, sodium chlorate, 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 Information
Certain statements contained in this news release constitute forward-looking information within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking information 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 information in this news release include statements respecting the timing and expected completion date of the Arrangement. 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 that the conditions of the Arrangement, such as receipt of shareholder and regulatory approvals, may not be satisfied or, where applicable, waived by Chemtrade, as well as the risks and uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual Information Form, the "Risks and Uncertainties" section of the Fund's most recent Management's Discussion & Analysis, and the "Risk Factors" section of the Fund's short form prospectus for the Offering.
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.
The Fund disclaims any intention or obligation to update any forward-looking information even if new information becomes available, as a result of future events or for any other reason, except as required by law. The forward-looking information 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
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For further information: Mark Davis, President & CEO ,Tel: (416) 496-4176; Rohit Bhardwaj, Vice President, Finance & CFO, Tel: (416) 496-4177