Tervita Corporation (“Tervita”) announced today that Tervita 2018 Escrow Corporation (the “Escrow Issuer”) has commenced an offering (the “Offering”) of US$250 million aggregate principal amount of its senior secured notes due 2021 (the “Notes”). The Escrow Issuer is a wholly owned subsidiary of Tervita that has been formed for the purposes of completing this Offering.
The Offering is being made in connection with the previously announced a plan of arrangement (the “Arrangement”) pursuant to which Tervita will, among other things, acquire all of the issued and outstanding shares of Newalta Corporation (“Newalta”) and amalgamate with Newalta (such amalgamated entity, “Amalco”). The net proceeds of the Offering are intended to be used, together with Tervita’s cash balances and availability under its revolving credit facility, to (i) fund the refinancing of Newalta’s existing debt in connection with the consummation of the Arrangement and (ii) pay transaction fees and expenses in connection with the Arrangement and the related transactions. However, this Offering is scheduled to close prior to the completion of the Arrangement. Therefore, the net proceeds of the Offering will be held in escrow until the satisfaction of specified conditions precedent, including the satisfaction or waiver of all conditions precedent to the consummation of the Arrangement.
If the escrow release conditions are satisfied on or prior to September 30, 2018, then the net proceeds from the Offering will be released from escrow. As a step in the Arrangement, following the amalgamation of Tervita and Newalta, the Escrow Issuer will be wound-up into Amalco. In connection with such winding up, the Notes will be automatically exchanged, without any action on the part of the holders of Notes, for a like principal amount of additional notes issued by Amalco under the indenture governing Tervita’s existing 7.625% Senior Secured Notes due 2021 (the “Secured Notes”), under which Tervita previously issued US$360.0 million aggregate principal amount of Secured Notes, and the Notes will be deemed to be cancelled. The Arrangement is currently anticipated to close in the second or third quarter of 2018.
The securities mentioned herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and are being offered and sold in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act. In addition, the securities mentioned herein have not been and will not be qualified for distribution by prospectus under Canadian securities laws and are being offered and sold in the United States, Canada and other countries only pursuant to an exemption from the prospectus requirements of Canadian securities laws.
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Reader Advisory Regarding Forward-Looking Statements
This press release contains certain “forward-looking statements” or “forward-looking information” (collectively referred to herein as “forward-looking statements”) under applicable securities laws. Such forward-looking statements include, without limitation, our future plans and expectations that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Tervita. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or are events or conditions that “will”, “would”, “may”, “could” or “should” occur or be achieved.
This press release contains forward-looking statements, pertaining to, among other things, our expectations regarding: the proposed Notes offering, the Escrow Issuer’s plans to conduct the proposed Offering, Tervita’s plans to assume the obligations under the Notes, the intended use of proceeds in respect of the Offering, the timing for completion of the Arrangement, our ability to successfully effect the foregoing, that the Notes will not be registered under the Securities Act, that the offering is an exempt distribution not requiring a prospectus and the jurisdictions where offers, solicitations, purchases or sales will occur. These statements are subject to all of the risks and uncertainties that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These risks include, but are not limited to, general economic conditions, commodity price volatility, currency fluctuations, changes in legislation, risks relating to the Arrangement (including risks associated with securing certain regulatory and court approvals necessary to consummate the Arrangement) and certain other known and unknown risks.
Although Tervita believes that the material factors, expectations and assumptions expressed in such forward-looking statements are reasonable based on information available to it on the date such statements were made, no assurances can be given. Actual results may differ materially from what was expressed or implied in the forward-looking statements and readers should not place undue importance or reliance on the forward-looking statements. Statements including forward-looking statements are made as of the date they are given and, except as required by applicable laws, Tervita disclaims any intention or obligation to publically update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.