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Attention Business Editors
Canyon Services Group Inc. announces $40.7 million financing by way of bought deal
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, March 11 /CNW/ - Canyon Services Group Inc. ("Canyon" or the
"Company") (TSX:FRC) is pleased to announce that it has entered into an
agreement with a syndicate of underwriters led by Peters & Co. Limited and
including Cormark Securities Inc., Raymond James Ltd. and Wellington West
Capital Markets Inc. (the "Underwriters") pursuant to which the Underwriters
have agreed to purchase on a "bought deal" basis 10.7 million common shares
("Common Shares") of Canyon at a price of $3.80 per Common Share (the "Issue
Price") for aggregate gross proceeds of approximately $40.7 million (the
"Offering"). Canyon has also granted the Underwriters an option (the
"Over-Allotment Option") to purchase up to an additional 1.6 million Common
Shares at the Issue Price to cover over-allotments, if any, for additional
gross proceeds of approximately $6.1 million. The Over-Allotment Option is
exercisable in whole or in part at any time until 30 days after the closing of
the Offering.
Proceeds of the Offering will be used to fund the Company's expanded 2010
capital program, to temporarily reduce bank indebtedness and for general
corporate purposes. Canyon's continued expansion into deeper segments of the
pressure pumping market with the successful completion of large, horizontal,
multi-stage fracturing programs in Alberta and British Columbia, has resulted
in increased demand for Canyon's services and the need to expand its pressure
pumping fleet by approximately 50,000 hhp. Canyon's new capital program will
increase the Company's horsepower capabilities from 75,000 hhp in Q2 2010 to
approximately 125,000 hhp by late 2010 or early 2011. Management believes this
expansion positions Canyon as one of the leaders in providing pressure pumping
services to Canada's unconventional oil and natural gas resource plays.
Pursuant to the Offering, the Common Shares will be offered in all
provinces of Canada by way of a short form prospectus and by way of private
placement in the United States pursuant to exemptions from the registration
requirements pursuant to Rule 144A and/or Regulation D of the United States
Securities Act of 1933.
Closing of the Offering is expected to occur on or about April 6, 2010
and is subject to certain customary conditions including, but not limited to,
the receipt of all necessary approvals including the approval of the Toronto
Stock Exchange.
ADVISORY: This press release contains forward-looking statements which
may include statements concerning the closing date of the Offering, and the
anticipated use of the net proceeds of the Offering, expanded capital program
and debt reduction. Although Canyon believes that the expectations reflected
in these forward-looking statements are reasonable, undue reliance should not
be placed on them because Canyon can give no assurance that they will prove to
be correct. Since forward-looking statements address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. The closing of the Offering could be delayed if Canyon is not
able to obtain the necessary regulatory and stock exchange approvals on the
timelines it has planned. The Offering will not be completed at all if these
approvals are not obtained or some other condition to the closing is not
satisfied. Accordingly, there is a risk that the Offering will not be
completed within the anticipated time or at all. The intended use of the net
proceeds of the Offering by Canyon might change if the board of directors of
Canyon determines that it would be in the best interests of Canyon to deploy
the proceeds for some other purpose.
The forward-looking statements contained in this press release are made
as of the date hereof and Canyon undertakes no obligations to update publicly
or revise any forward-looking statements or information, whether as a result
of new information, future events or otherwise, unless so required by
applicable securities laws.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities of the Corporation within the
United States. The securities of the Corporation have not been and will not be
registered under the United States Securities Act of 1933, as amended (the
"1933 Act") or any state securities laws. Accordingly, the Common Shares may
not be offered or sold in the United States or to U.S. persons (as such terms
are defined in Regulation S under the 1933 Act) unless registered under the
1933 Act and applicable state securities laws or an exemption from such
registration is available.
The Toronto Stock Exchange has neither approved nor disapproved the
contents of this press release.
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/For further information: Brad Fedora, President & CEO, Phone (403)
290-2491; Barry O'Brien, Vice President, Finance & CFO, Phone (403) 290-2478/
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