TORONTO, Sept. 15, 2016 /CNW/ - Clearwater Capital Management Inc. ("Clearwater"), on behalf of managed accounts, as long-time and significant holders of common shares and also holders of convertible debentures of Canexus Corporation ("Canexus"), announced today that it has strongly urged Canexus to implement a proper process to deal with the acquisition proposal by Chemtrade Logistics Income Fund ("Chemtrade") and related matters and to suspend the proposed note offering pending completion of that process. Specifically, in a letter to the Canexus board (attached) Clearwater urged the formation of a special committee of the Canexus board to fully and fairly consider value-maximizing alternatives and, in view of the value-reducing implications of the proposed note offering, to suspend that offering and to consider alternatives to deal with Canexus' financing objectives.
Clearwater announced that it has heard from other significant shareholders of Canexus and that holders of more than 25% of Canexus' shares strongly believe that a fully independent value-maximizing process and suspension of the note offering is in the company's best interests. As mentioned above, Canexus has received a publicly-disclosed acquisition proposal from Chemtrade, but rejected it and has without apparent reason refused to engage in discussions about a potential transaction.
The best interests of Canexus and its stakeholders require full consideration of credible, available alternatives that maximize value. Clearwater has demanded, in a letter publicly released (see attachment), that Canexus establish a special committee with non-conflicted advisors to oversee the process.
Canexus' disclosed strategy of debt repayment is a long path that also presents certain risks to the company and shareholders, and follows a number of significant reversals, including the ultimately failed control transaction process with Superior Plus Corp. and the catastrophic investment in the NATO trans loading facility (which investment resulted in a loss of $410 million or more than 80% of the investment and approximately $2.20 per share and left Canexus with a debt load that lead to the termination of the dividend and a startling 90% diminution in share price, from $9.45 in March 2013 to $1.23 on September 13, 2016).Clearwater notes that the share price was $1.23 prior to Chemtrade's disclosure of its proposed purchase of Canaxus, a significant discount to Chemtrade's proposed minimum purchase price of $1.45.
The steps urged by Clearwater are critically necessary in order that Canexus' best interests can be properly and fairly served.
SOURCE Clearwater Capital Management Inc.
For further information: Brian Chapman, (416) 642-5701