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CALGARY, July 8 /CNW/ - (TSX: CUQ) - The Churchill Corporation ("Churchill") is pleased to announce that it has closed the partial exercise of the subscription receipt over-allotment option (the "Over-Allotment Closing") granted to the underwriters pursuant to Churchill's previously announced public offering of subscription receipts ("Subscription Receipts") and 6.00% convertible extendible unsecured subordinated debentures (the "Debentures") due June 30, 2015 (the "Offering"). At the Over-Allotment Closing, 324,500 Subscription Receipts were issued at a price of $16.75 per Subscription Receipt for additional net proceeds of $5.2 million. Combined with the 6,000,000 Subscription Receipts and $86.25 million aggregate principal amount of Debentures previously issued, the Offering resulted in net proceeds of approximately $185 million to Churchill.
Churchill intends to use the proceeds of the Offering to fund a portion of the purchase price of its previously announced acquisition of Seacliff Construction Corp. (the "Acquisition"). The Acquisition is expected to close on or about July 13, 2010 (the "Acquisition Closing Date"), subject to customary transaction closing conditions, including regulatory and shareholder approval.
On the Acquisition Closing Date, each outstanding Subscription Receipt will automatically be exchanged on a one-to-one basis for common shares of Churchill without any further action on the part of the holder and without payment of additional consideration. The proceeds from the Over-Allotment Closing will be held by a trustee, as escrow agent, and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments) until the earlier of the Acquisition Closing and the Termination Date. If the closing of the Acquisition (the "Acquisition Closing") does not occur on or before August 20, 2010, or is terminated at any earlier time (in either case, the "Termination Date"), holders of Subscription Receipts will receive the full purchase price of the Subscription Receipt, together with their pro rata portion of interest earned thereon between the date of the Over-Allotment Closing and the Termination Date.
The offering of Subscription Receipts was led by RBC Capital Markets and Raymond James Ltd. and the offering of the Debentures was led by RBC Capital Markets. The underwriting syndicate for the Offering included RBC Capital Markets, Raymond James Ltd., National Bank Financial Inc., CIBC World Markets Inc., TD Securities Inc., Canaccord Genuity Corp., GMP Securities L.P., Macquarie Capital Markets Canada Ltd., HSBC Securities (Canada) Inc., Paradigm Capital Inc., and Stonecap Securities Inc.
Neither the Subscription Receipts or the Debentures offered have 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 applicable 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 jurisdiction in which such offer, solicitation or sale would be unlawful.
About The Churchill Corporation:
The Churchill Corporation provides building construction, industrial insulation and electrical contracting services throughout Western Canada. Churchill common shares are listed on the Toronto Stock Exchange under the symbol "CUQ". The Subscription Receipts are listed on the Toronto Stock Exchange under the symbol "CUQ.R" and the Debentures are listed on the Toronto Stock Exchange under the symbol "CUQ.DB".
FORWARD LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking statements". Forward-looking statements include, without limitation, statements regarding the timing of the closing of the Acquisition and the use of proceeds of the Over-Allotment Closing associated therewith. Many of these statements can be identified by looking for words such as "believes," "expects," "may," "will," "intends," "anticipates," "estimates," "continues," or the negative thereof, or other variations thereon. Although management of Churchill believes its expectations regarding these statements are based on reasonable assumptions and currently available information, it can give no assurance its expectations will be achieved. The Corporation cautions that, by their nature, forward-looking statements, involve risks, and uncertainties and that its actual actions, and/or results could differ materially from those expressed or implied in such forward-looking statements, and that the aforementioned risks, uncertainties and actions could affect the extent to which a particular projection materializes. The Corporation assumes no obligation to update the forward-looking statements should circumstances or the Corporation's management's estimates or opinions change, except as may be required by law.
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