News Releases

/NOT FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, Sept. 3, 2014 /CNW/ - Stuart Olson Inc. (TSX: SOX, SOX.DB) (“Stuart Olson” or the “Company”) today announced that it has entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc. and CIBC pursuant to which the underwriters will purchase $60 million principal amount of convertible unsecured subordinated debentures at a price of $1,000 per debenture (the “Debentures”). Stuart Olson has also granted the underwriters an over-allotment option to purchase up to an additional $9 million aggregate principal amount of Debentures, exercisable in whole or in part at any time for a period of 30 days following closing of the offering, to cover over-allotments, if any, and for market stabilization purposes.

The Debentures will mature on December 31, 2019 (the “Maturity Date”) and will accrue interest at the rate of 6.00% per annum payable on a semi-annual basis, payable on the last day of June and December of each year commencing December 31, 2014. At the holder’s option, the Debentures may be converted into common shares of Stuart Olson at any time up to the earlier of the Maturity Date, the business day immediately preceding the date fixed for redemption for the Debentures and the business day immediately preceding the date fixed for repurchase of the Debentures if called for repurchase pursuant to a “change of control”. The conversion price will be $14.15 for each common share of the Company, subject to adjustment in certain circumstances. The Debentures will be unsecured indebtedness of the Company and will be subject to, and governed by, the terms of a trust indenture to be entered into at the closing of the offering.

The Debentures will not be redeemable prior to December 31, 2017. On and after December 31, 2017 and prior to the December 31, 2018, Stuart Olson may, at its option, redeem the Debentures, in whole or in part, at par plus accrued and unpaid interest, provided that the volume weighted average trading price of Stuart Olson’s common shares on the Toronto Stock Exchange (“TSX”) for the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. On and after December 31, 2018 and prior to Maturity, the Debentures will be redeemable at the Company’s option at any time at par plus accrued and unpaid interest. The Company shall provide not more than 60 nor less than 30 days’ prior to notice of redemption.

Subject to specified conditions, Stuart Olson will have the right to repay the outstanding principal amount of the Debentures, on maturity or redemption, through the issuance of common shares of the Company. Stuart Olson also has the option to satisfy its obligation to pay interest through the issuance and sale of additional common shares of the Company, pursuant to which holders of Debentures will be entitled to receive a cash payment equal to the interest owed from the proceeds of sale of such common shares.

Stuart Olson intends to use the net proceeds of the offering to refinance at maturity a portion of the 6.00% Convertible Unsecured Subordinated Debentures due June 30, 2015 and, in the interim, to repay the balance of indebtedness under its revolving credit facility (the “Credit Facility”) in order to minimize interest costs. The remaining net proceeds will be maintained as cash on hand. Prior to June 30, 2015, the Credit Facility and cash on hand balances will be drawn and repaid as required for working capital needs and other general corporate purposes.

The offering is scheduled to close September 19, 2014 and is subject to the receipt of all necessary regulatory approvals, including the approval of the TSX.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada (excluding Quebec). This press release is not an offer of securities for sale in the United States. 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 exemption from registration under Rule 144A of the U.S. Securities Act of 1933. Stuart Olson does not intend to engage in a public offering of the securities in the United States.

About Stuart Olson Inc.

Stuart Olson Inc. provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to an array of public and private sector clients. The Company operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Stuart Olson common shares and its outstanding convertible debentures due June 30, 2015 are listed on the TSX under the symbols "SOX" and "SOX.DB", respectively.  www.stuartolson.com   

Forward Looking Information

This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, statements relating to an offering of Debentures by the Company, the closing date of the offering and the use of the net proceeds therefrom. Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

No forward-looking statement can be guaranteed. By its nature, forward-looking statements are based on assumptions involve known and unknown risks and uncertainties, which may cause actual results, performance or achievements of Stuart Olson to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements which include, but are not limited to, a material adverse change in the affairs of Stuart Olson or a development materially adversely affecting the financial markets, and the risks and uncertainties described in the Company's Annual Information Form filed with the applicable securities regulatory authorities in Canada under the Company's profile at www.sedar.com.  Although Stuart Olson has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.  Readers are encouraged to consider the foregoing risks, uncertainties and other factors carefully when evaluating the forward-looking statements and are cautioned not to place undue reliance upon such information when making investment decisions.  Stuart Olson expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

SOURCE Stuart Olson Inc.