pcNewsWire – Algoma Central Corporation (TSX: ALC) has entered into an agreement to sell, on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets, $75,000,000 principal amount of 5.25% convertible unsecured subordinated debentures.
Proceeds will be used to fund the redemption of its outstanding 6.00% convertible unsecured subordinated debentures due March 2018 and for general corporate purposes.
June 1, 2017
ALGOMA CENTRAL CORPORATION
Announces $75 million Public Offering of 5.25% Convertible Unsecured Subordinated Debentures
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Saint Catharines, Ontario – Algoma Central Corporation (“Algoma”) (TSX:ALC) announced
today that it has entered into an agreement to sell, on a bought deal basis to a syndicate of
underwriters led by CIBC Capital Markets, $75,000,000 principal amount of 5.25%
convertible unsecured subordinated debentures (the “Debentures”) at a price of $1,000 per
Debenture (the “Offering”). Algoma has also granted the underwriters an over-allotment
option to purchase up to an additional $7,500,000 aggregate principal amount of Debentures
at the same price exercisable in whole or in part at any time for a period of 30 days following
The Debentures will mature on June 30, 2024 and will bear interest at an annual rate of
5.25% payable semi-annually on the last day of June and December of each year,
commencing December 31, 2017. At the holder’s option, the Debentures may be converted
into common shares of Algoma (“Shares”) at any time prior to the close of business on
the earlier of June 30, 2024 and the business day immediately preceding the date specified
by Algoma for redemption of the Debentures. The conversion price will be $21.15 per Share
(the “Conversion Price”), subject to adjustment in certain circumstances.
The Debentures will not be redeemable before June 30, 2020. On and after June 30, 2020 and
prior to June 30, 2022, the Debentures may be redeemed in whole or in part from time to
time at Algoma’s option, provided that the volume weighted average trading price of the
Shares on the Toronto Stock Exchange during the 20 consecutive trading days ending on the
fifth trading day preceding the date on which the notice of the redemption is given is not
less than 125% of the Conversion Price. On and after June 30, 2022 and prior to the
maturity date, Algoma may, at its option, redeem the Debentures, in whole or in part, from
time to time at par plus accrued and unpaid interest.
Algoma expects to use the net proceeds of the Offering to fund the redemption of its
outstanding 6.00% convertible unsecured subordinated debentures due March 2018 (the
“Existing Debentures”) and for general corporate purposes. Algoma intends to provide
formal notice of its intention to redeem the Existing Debentures to the registered holders
thereof in accordance with the terms and conditions of the trust indenture governing the
Existing Debentures following the closing of the Offering.
The Offering is expected to close on or about June 21, 2017 and is subject to certain conditions
including, but not limited to, the receipt of all necessary approvals, including the approval
of the Toronto Stock Exchange.
A preliminary short-form prospectus will be filed by June 7, 2017 with the securities
regulatory authorities in all provinces of Canada. The securities offered have not been and
will not be registered under the U.S. Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an applicable exemption from the
registrations requirements of such Act. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy the securities in any jurisdiction.
ALGOMA CENTRAL CORPORATION
Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk
carriers on the Great Lakes – St. Lawrence Waterway, including self-unloading dry-bulk
carriers, gearless dry bulk carriers and product tankers. Algoma also owns ocean selfunloading
vessels operating in international markets. Algoma provides ship management
services for other ship owners. The Company is expanding into global dry-bulk markets with
investments in businesses specializing in pneumatic cement carrying vessels and in short-sea
Ken Bloch Soerensen
President and Chief Executive Officer
Peter D. Winkley, CPA, CA
Chief Financial Officer