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Aecon announces private placement of convertible debentures

Mar 4, 2005

Up to $25 million to be raised --

Toronto, Ontario – March 4, 2005: Aecon Group Inc. (TSX: ARE) today announced that it has entered into an agreement with a syndicate of underwriters led by GMP Securities Ltd. and including Paradigm Capital Inc. and Canaccord Capital Corporation pursuant to which the underwriters will purchase up to $25 million in unsecured, subordinated convertible debentures. Under the terms of the agreement, the underwriters will purchase $20 million principal amount of the debentures on an underwritten private placement basis and have been granted an option to purchase an additional $5 million at any time up to the date of closing.

The convertible debentures will mature on March 17, 2010 and will accrue interest at the rate of 8.25% per annum payable on a semi-annual basis. At the holder's option, the convertible debentures may be converted into common shares in the capital of Aecon Group Inc. at any time up to the maturity date. The conversion price will be $7.60 for each common share, subject to adjustment in certain circumstances.

The convertible debentures will be direct, unsecured obligations of Aecon Group Inc., subordinated to other indebtedness of the Company for borrowed money and ranking equally with all other unsecured subordinated indebtedness.

Hochtief Canada Inc., Aecon's largest shareholder, has agreed that it will not sell or otherwise monetize any securities of Aecon that it directly or indirectly owns for a minimum period of 60 days following closing.

The convertible debentures will not be redeemable before March 18, 2008. From March 18, 2008 through the maturity date, Aecon may, at its option, redeem the convertible debentures, in whole or in part, at par plus accrued and unpaid interest provided that the weighted average trading price of the common shares on the Toronto Stock Exchange during a specified period prior to redemption is not less than 125% of the conversion price.

Subject to specified conditions, Aecon will have the right to repay the outstanding principal amount of the convertible debentures, on maturity or redemption, through the issuance of common shares of the Company. Aecon also has the option to satisfy its obligation to pay interest through the issuance and sale of additional common shares of the Company on a private placement basis. Additionally, Aecon will have the option, subject to prior agreement of the holders, to settle its obligations on conversion by way of a cash payment of equal value.

Aecon will use the net proceeds of the offering to substantially replace its traditional bank-financed operating facility with debt that is significantly less restrictive.

The offering is scheduled to close on or about March 17, 2005 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.

The securities offered have not been 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 exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Aecon Group Inc. is Canada's largest publicly traded construction and infrastructure development company. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and internationally.