Capstone Infrastructure Corporation and Renewable Energy Developers
Offer to Purchase Debentures
TORONTO--(BUSINESS WIRE)--Capstone Infrastructure Corporation (“Capstone”) (TSX: CSE; CSE.PR.A; CSE.DB.A) and its wholly-owned subsidiary, Renewable Energy Developers Inc. (“ReD”) (TSX: RDZ.DB), announced today that, in connection with the recently completed plan of arrangement (the “Arrangement”) whereby Capstone acquired all of the outstanding ReD common shares, ReD is making an offer to purchase for cash (the “Offer”) its 6.75% convertible unsecured subordinated debentures due December 31, 2017 (the “Debentures”) at a price equal to 101% of their principal amount plus accrued and unpaid interest, as is required under the trust indenture governing the Debentures.
Completion of the Arrangement constituted a change of control under the terms of the trust indenture governing the Debentures and, consequently, ReD is required to make the Offer.
As of October 28, 2013, there was $34.5 million aggregate principal amount of Debentures outstanding.
The offer to purchase the Debentures will be delivered to the registered holder of the Debentures and the Offer will remain open for acceptance until 5:00 p.m. (Toronto time) on December 11, 2013. As the Debentures are issued in book-entry only form, beneficial holders of Debentures who wish to accept the Offer must contact the investment dealer, stockbroker, financial institution or other nominee through which they hold their Debentures and instruct such nominee to accept the Offer on their behalf. Beneficial holders should also confirm with such nominee any deadlines by which the holder must provide acceptance instructions in order for the nominee to cause the Offer to be accepted on the holder's behalf before the expiry of the Offer on December 11, 2013. The notice of the change of control and the offer to purchase Debentures will be available under ReD’s SEDAR profile at www.sedar.com.
Holders of Debentures who deposit their Debentures to the Offer will also receive accrued and unpaid interest on such tendered Debentures up to, and including, the Offer expiration date of December 11, 2013.
In the event that 90% or more of the principal amount of the Debentures outstanding on the date of the Offer are tendered for purchase by ReD pursuant to the Offer, ReD will have the right to redeem all of the remaining outstanding Debentures at the Offer price immediately following the expiration of the Offer.
Subject to such 90% redemption right, should a Debenture holder elect not to accept the Offer, the Debentures will remain outstanding and will continue to be governed by the terms of the trust indenture.
The boards of directors of Capstone and ReD have not made any recommendations with respect to whether Debenture holders should tender their Debentures under the Offer. Holders of Debentures are urged to carefully evaluate all information in ReD’s offer to purchase and to consult their own investment, legal, tax and other professional advisors before making their own decisions whether to deposit their Debentures in acceptance of the Offer.
About Capstone Infrastructure Corporation
Capstone’s mission is to build and responsibly manage a high quality portfolio of infrastructure businesses in Canada and internationally in order to deliver a superior total return to shareholders by providing reliable income and capital appreciation. Capstone’s portfolio comprises investments in Canada’s power infrastructure, including gas cogeneration, wind, hydro, biomass and solar power generating facilities, representing approximately net 465 megawatts of installed capacity, and contracted wind power development projects totalling net 79 megawatts of capacity. Capstone also invests in utilities, including a 33.3% interest in a district heating business in Sweden, and a 50% interest in a regulated water utility in the United Kingdom. For more information, please visit www.capstoneinfrastructure.com
Notice to Readers
Certain of the statements contained within this document are forward-looking and reflect management’s expectations regarding the future of Capstone and ReD, based on information currently available to Capstone and ReD. Forward-looking statements are provided for the purpose of presenting information about Capstone’s and ReD’s management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements use forward-looking words, such as “anticipate”, “continue”, “could”, “expect”, “may”, “will”, “estimate”, “plan”, “believe” or other similar words. These statements are subject to known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements within this document are based on information currently available and what Capstone and ReD currently believe are reasonable assumptions.
The forward-looking statements within this document reflect current expectations of Capstone and ReD as at the date of this document and speak only as at the date of this document. Except as may be required by applicable law, Capstone and ReD do not undertake any obligation to publicly update or revise any forward-looking statements and financial outlook.
This document is not an offer or invitation for the subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of any investors. Before making an investment in Capstone or ReD, an investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary.