some dilution by at less of a discount.

 

cheers,

dave.

 

Canexus Corporation Announces Offering of $75,050,000 of Common Shares for Further Development of North American Terminal Operation Capabilities and to Fund Other Ongoing Growth Initiatives

RELATED QUOTES

Symbol Price Change
CUS.TO 8.11 -0.08

CALGARY, ALBERTA--(Marketwire - Nov. 29, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Canexus Corporation (CUS.TO) (the "Corporation" or "Canexus") today announced that it has entered into a "bought deal" financing agreement with a syndicate of underwriters, led by Scotia Capital Inc., under which the underwriters have agreed to purchase from Canexus and sell to the public 9,500,000 common shares of the Corporation ("Common Shares") at a purchase price of $7.90 per Common Share (the "Offering Price"), for gross proceeds of $75,050,000 (the "Offering"). Canexus has also granted the underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to a further 1,425,000 Common Shares at the Offering Price, solely to cover their over-allocation position, if any. The Over-allotment Option will be exercisable in whole or in part, at the sole discretion of the underwriters, until 30 days following the closing of the Offering. If the Over-Allotment Option is exercised in full, the gross proceeds raised pursuant to the Offering will be $86,307,500. 

The net proceeds of the offering will be used for expansion of capabilities at the North American Terminal Operation ("NATO") at Bruderheim, Alberta and to fund other ongoing growth initiatives, including our hydrochloric acid expansions at North Vancouver.

The next phase of NATO expansion, is planned to connect the Canexus Bruderheim terminal ("Bruderheim" or "Bruderheim terminal") to nearby bitumen blend pipelines and diluent pipelines, and to build out the rail infrastructure, loading/offloading and above ground tank storage required to allow for unit train movement of up to 118 tank cars (approximately 70,000 barrel movements) in single trains daily. The cost of the project is expected to be approximately $125 million, inclusive of $45 million of pre-spending authorized by Canexus' Board of Directors to date for long lead items and other construction activities that are currently ongoing. If this next phase of NATO expansion receives full project approval in the coming months, these expanded capabilities should be operational in the third quarter of 2013.

"We are pleased to announce continued progress on the expansion of our Bruderheim terminal capabilities to include pipeline connected unit train operations for large scale movements of bitumen blend and diluent by rail," said Mr. Gary Kubera, President and Chief Executive Officer. "Sufficient progress on multiple potential pipeline/terminal connections and negotiations with customers for unit train shipments at Bruderheim under multi-year, take-or-pay terms, along with robust market drivers, gives us the confidence to continue to advance this project."

The Corporation expects this next phase of NATO expansion, if fully approved, to be accretive to all common shareholders after considering the Offering announced today. It also sets the stage for future incremental unit train capability, utilization of the existing 1.6 million barrels of salt cavern storage, development of additional salt cavern storage and pursuit of other attractive investment opportunities at this 480 acre site.

Dividends are currently payable on a quarterly basis at an annual rate of $0.5472 per Common Share.