TORONTO--(BUSINESS WIRE)--Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade” or the “Fund”) announced today that it will redeem on June 30, 2023 (the “Redemption Date”) the remaining $101,115 million aggregate principal amount of its 4.75% convertible unsecured subordinated debentures due May 31, 2024 (the “2024 Debentures”) in accordance with the terms of the trust indenture, as amended and supplemented by supplemental indentures thereto (collectively, the “Indenture”), pursuant to which they were issued (the “Redemption”).
On the Redemption Date, holders of the 2024 Debentures will receive approximately $1,003.9041 for each $1,000 principal amount of 2024 Debentures, representing their par value, plus all accrued and unpaid interest thereon to but excluding the Redemption Date. The 2024 Debentures that are redeemed in connection with the Redemption will cease to bear interest from and after the Redemption Date. Formal notice of redemption is being delivered to the holders of the 2024 Debentures today in accordance with the terms of the Indenture. The aggregate amount of 2024 Debentures outstanding as of the date hereof is $101,115,000.
Chemtrade issued $110.0 million of debentures in the first quarter of 2023. The proceeds of this debenture financing were used to partially redeem the debentures coming due in May 2024. Chemtrade is redeeming the remainder of the May 2024 debentures using a combination of cash and liquidity from the revolving credit facilities. Following the full redemption of the 2024 debentures, the overall principal amount of outstanding convertible debentures will be approximately $426.2 million, which is roughly $91 million (18%) lower than on December 31, 2022.
Mr. Rohit Bhardwaj, Chemtrade’s Chief Financial Officer commented on the redemption, “We are pleased that we have generated a significant amount of surplus free cash and have sufficiently reduced our senior leverage such that we are able to reduce the amount of convertible debentures outstanding on our balance sheet by roughly $91 million.”
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is also the largest producer of high purity sulphuric acid for the semiconductor industry in North America. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release include statements respecting certain future expectations about the Fund’s intention to redeem the 2024 Debentures and the expected sources of funding with respect thereto. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof.
These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the “Risk Factors” section of the Fund’s latest Annual Information Form and the “Risks and Uncertainties” section of the Fund’s most recent Management’s Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: the timing and completion of the Redemption; there being no significant disruptions affecting the operations of the Fund and its subsidiaries; the timely receipt of required regulatory approvals; and global economic performance.
Except as required by law, the Fund does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason. The forward-looking information contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by the Fund with the securities regulatory authorities, available at www.sedar.com.