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BRAMPTON, ON, April 6 /CNW/ - The DATA Group Income Fund (TSX:DGI.UN) (the "Fund") announced today that it has entered into an agreement to sell to a syndicate of underwriters, led by TD Securities Inc., $45 million principal amount of 6.00% convertible unsecured subordinated debentures due June 30, 2017. The Fund has also granted the underwriters an option (the "Over-allotment Option"), exercisable in whole or in part at any time up until 30 days after the closing date, to purchase an additional $5 million principal amount of debentures, at the same price. If the Over-allotment Option is exercised in full, the total gross proceeds of the financing will be $50 million.
The debentures will bear interest at a rate of 6.00% per annum payable semi-annually in arrears on June 30 and December 31 in each year commencing on December 31, 2010, and will mature on June 30, 2017. Holders may convert the debentures into units of the Fund at a conversion price of $12.20 per unit (the "Conversion Price") at any time prior to the earlier of June 30, 2017 and the date fixed by the Fund for redemption.
The debentures cannot be redeemed by the Fund before June 30, 2013. On or after June 30, 2013 and prior to June 30, 2015, the Fund has the option to redeem the debentures in whole or in part, from time to time, at a price equal to their principal amount plus accrued interest, provided that the volume weighted average trading price for the units is not less than 125% of the Conversion Price. On or after June 30, 2015, the Fund may redeem the debentures in whole or in part, from time to time, at a price equal to their principal amount plus accrued and unpaid interest.
The offering will be made in all provinces of Canada and is expected to close on or about April 27, 2010, subject to regulatory approval.
The net proceeds of the offering will be used to repay a portion of The Data Group Limited Partnership's outstanding borrowings under its existing revolving credit facilities.
The debentures have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement of such Act. This news release is not an offer of securities for sale in the United States.
About the Fund
The Fund owns directly and indirectly all of the outstanding partnership units of The Data Group Limited Partnership (the "Data Group") and all of the outstanding shares of the Data Group's general partner, Data Business Forms Limited. The DATA Group is a leading provider of document management solutions including printed products. Founded in 1959, the Data Group operates numerous facilities in 11 regions across Canada and has a leading market share in the total document management services segment.
Additional information relating to The DATA Group Income Fund is available on the System for Electronic Document Analysis and retrieval (SEDAR) at www.sedar.com and www.datagroupincomefund.com.
Certain statements in this press release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of the Fund and/or the Data Group, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as "may", "would", "could", "will", "expect", "anticipate", "estimate", "believe", "intend", "plan", and other similar expressions are intended to identify forward-looking statements. These statements reflect the Fund's current views regarding future events and operating performance, are based on information currently available to the Fund, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance or achievements of the Fund and the Data Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. The principal assumptions and risks that the Fund made or took into account in the preparation of these forward-looking statements include the impact of the weakened domestic and global economic conditions on the Data Group's businesses; the risk that the Data Group's efforts to reduce its operating costs may not become effective as quickly as the Data Group expects, thereby impacting the Data Group's profitability and cash available for distribution should the Data Group's revenues decline further than expected; the risk that, should the Data Group's revenues decline further than expected, the cost reduction measures taken by the Data Group in response to the current economic environment may not be sufficient and further reductions may be necessary; the Data Group's ability to grow its sales or even maintain historical levels of its sales of product and services including printed business documents; increases in the costs of paper and other raw materials used by the Data Group; the Data Group's ability to maintain relationships with its customers; competition from competitors supplying similar products and services; and the application of recent changes to the income tax treatment of certain income trusts, such as the Fund, which will subject the Fund to tax commencing in 2011, and the effect of those changes on the trading price of the Fund's units. Additional factors are discussed elsewhere in this press release and under the heading "Risks and Uncertainties" in the Fund's management's discussion and analysis and in the Fund's other publicly available disclosure documents, as filed by the Fund on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, the Fund does not intend and does not assume any obligation to update these forward-looking statements.
SOURCE THE DATA GROUP INCOME FUND
For further information: For further information: Mr. David Odell, President and CEO, The Data Group Limited Partnership, Tel: (905) 791-3151; Mr. Paul O'Shea, Chief Financial Officer, The Data Group Limited Partnership, Tel: (905) 791-3151