For Immediate Release
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES.
BFI CANADA INCOME FUND
PRICES $340 MILLION OFFERING OF SUBSCRIPTION RECEIPTS AND ANNOUNCES UNITHOLDER MEETING DATE
TORONTO, ONTARIO – December 20, 2004 – BFI Canada Income Fund (TSX: BFC.UN) announced today that it has entered into an underwriting agreement with a syndicate of underwriters led by CIBC World Markets Inc. and BMO Nesbitt Burns Inc., and including National Bank Financial Inc., TD Securities Inc., Scotia Capital Inc., Sprott Securities Inc. and First Associates Investments Inc. for an offering of 14,166,667 subscription receipts at a price of $24.00 per subscription receipt, for total gross proceeds of $340,000,008.00. The Fund has also granted to the underwriters an option to purchase an additional 1,416,667 subscription receipts, exercisable until 30 days following closing of the offering to cover over-allotments, if any, on the same terms and conditions and exercisable until 30 days following closing of the offering to cover over-allotments, if any. The Toronto Stock Exchange has conditionally approved the listing of the subscription receipts and the underlying units, subject to satisfaction of customary conditions of the Exchange. Closing of the offering is anticipated to occur on or about January 5, 2005.
The offering is being undertaken in connection with the previously announced transaction agreement between the Fund and IESI Corporation (the “Transaction”), which will create one of the largest non-hazardous solid waste management companies in North America. The Fund will indirectly acquire 100% of the common stock of IESI, and the current equity investors in IESI will retain an approximately 35.6% indirect interest in the Fund (assuming the full over-allotment option is exercised). The Transaction is expected to close on or about January 21, 2005 subject to satisfaction of various conditions, including (among others) unitholder approval and the receipt of all necessary regulatory approvals.
The offering proceeds will be held in escrow pending the closing of the Transaction and, upon release, will be applied (together with the proceeds of new debt financing) to repay substantially all of IESI’s third party debt and the bank debt of BFI Canada Holdings used to fund its acquisition of the Ridge landfill near Chatham, Ontario, which is expected to close January 4, 2005.
The Fund will be filing its final short form prospectus relating to the offering with the Canadian securities regulatory authorities. The prospectus and the documents incorporated by reference therein will be available for viewing on the SEDAR website at www.sedar.com. Printed copies of the final prospectus will be available from the underwriters of the offering.
The Fund will also be mailing to unitholders of record as of December 6, 2004 its management information circular in connection with its January 20, 2005 special meeting of unitholders to be held at the Gallery, Toronto Stock Exchange, 130 King Street West, Toronto, Ontario at 10:00 a.m. EST. At the meeting, unitholders will be asked to consider and vote upon a special resolution to approve the Transaction. Management and the Trustees of the Fund unanimously recommend that unitholders vote in favour of the special resolution to approve the Transaction at the Meeting.
BFI Canada Income Fund, through its subsidiaries, is one of Canada’s largest full-service waste management companies, providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. The Fund’s units are listed on the Toronto Stock Exchange under the symbol BFC.UN. For more information on the Fund, visit www.bficanada.com.
The subscription receipts and underlying units offered by the Fund have not been, nor will be, registered under the United States 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 requirement of such Act.
Notes to Readers
This news 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 described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under applicable securities laws of any such jurisdiction. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933 (the “Securities Act”) and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.
This news release may contain “forward-looking statement” relating to BFI Canada and IESI within the meaning of applicable securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should’, “believe” and similar expressions are intended to identify forward-looking statements. These statements 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. Certain of these risks and uncertainties include: the combined business is capital intensive and may consume cash in excess of cash flow from its operations and borrowings; the combined business’ growth strategy depends, in part, on acquiring other solid waste management or related businesses and expanding existing landfills an other operations, which the combined business may be unable to do; the combined business may not be able to successfully manage its growth; the combined business faces risks related to certain deficiencies in the operation of the combined business’ internal control over financial reporting and disclosure controls and procedures; competition could reduce the combined business’ profitability or limit its ability to grow; provincial, state and municipal requirements to reduce landfill disposal by encouraging various alternatives may adversely affect the combined business’ ability to operate landfills at full capacity; the combined business may lose contracts through competitive bidding or early termination, which would cause revenue to decline; the combined business’ U.S. operations are geographically concentrated in the northeastern and southern United States and susceptible to those regions’ local economies and regulations; the loss of the City of New York as a customer could have a significant adverse effect on the combines business’ operations; the ability of the combined business to pay dividends or make other payments or advances (which will support distributions of the Fund’s units) will be subject to applicable laws and contractual restrictions contained in the instruments governing the indebtedness of those entities; the degree to which the combined business is leveraged could adversely affect its financial condition and make it more difficult for the combined business to make payments with respect to its debt; despite its current indebtedness, the combined business to made require additional equity or debt financing to fund its growth and debt repayment obligations; the ability of the combined business to service its debt, remain competitive, sustain its growth and expand its operations will require large amounts of cash, and the combined business’ ability to generate cash depends on many factors, some of which are beyond its control; the interests of the retained interest holders and their affiliates could conflict with those of other investors; the combined business depends heavily on its senior management; if the combined business is unable to obtain performance or surety bonds, letters of credit or insurance, the combined business may not be able to enter into additional municipal solid waste collection contracts or retain necessary landfill operations permits; the combined business is subject to extensive legislation and governmental regulation that may restrict its operations or increase its costs of operations; the combined business may not be able to obtain permits it requires to operate its business; the combined business may be subject to legal action relating to compliance with environmental laws; the combined business may have liability for environmental contamination; and the combined business will always face the risk of liability, and insurance may not always be available or sufficient.
BFI Canada urges you to carefully consider the factors set forth above in evaluating the forward-looking statements and caution you not to place undue reliance on such forward-looking statements. There may also be additional risks that BFI Canada does not presently know of or that BFI Canada currently believe are immaterial, which could also impair their respective business. In light of these risks, uncertainties and assumptions, the forward-looking events may or may not occur. Additional information regarding these and other factors which could materially affect the forward-looking statements can be found in BFI Canada’s renewal annual information form for the period ended December 31, 2003 filed with the Canadian securities regulatory authorities and in IESI’s periodic reports filed with the Securities and Exchange Commission, including the risk factors detailed in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of IESI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003. The forward-looking statements contained herein are made only as of the date of this news release and BFI Canada undertakes no obligation to publicly update the forward-looking statements to reflect new information, subsequent events or otherwise.
For further information:
Joseph D. Quarin, BFI Canada
Chief Financial Officer
Tel: (416) 401-7722
Email: joe.quarin@bficanada.com
Anne MacMicken
Manager, Investor and Employee Relations,
BFI Canada
Tel: (416) 401-7729
Email: anne.macmicken@bficanada.com
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