CALGARY, Aug. 7, 2019 /CNW/ - Stuart Olson Inc. (TSX: SOX, SOX.DB.A) ("Stuart Olson" or the "Company") today announced that it has entered into an agreement with Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts that it manages (collectively, "Canso"), pursuant to which Canso will purchase, subject to Toronto Stock Exchange and shareholder approval, $70,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the "Debentures") priced at par, with an interest rate of 7.00% per annum, payable semi-annually on the last business day of June and December of each year commencing on December 31, 2019 (the "Placement"). The Debentures will mature on the fifth anniversary of their issue date (the "Maturity Date").

The Debentures will be convertible at the holder's option at any time prior to the close of business on the day immediately preceding the Maturity Date at a conversion price of $4.87 per Common Share, being a conversion rate of approximately 205.3388 Common Shares for each $1,000 principal amount of Debentures. The conversion price per Common Share was established at 140% of the 30-day volume weighted average trading price calculated after the close of trading on August 1, 2019.

On and after the fourth anniversary date and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at Stuart Olson's option at a price equal to their principal amount plus accrued and unpaid interest.

The Company intends to use the net proceeds of the Placement, together with other sources including its revolving credit facility, to redeem and repay the outstanding $80.5 million 6.0% convertible unsecured subordinated debentures that mature on December 31, 2019 (the "Existing Debentures").

The Placement is expected to close in late September and, if closed, the Existing Debentures are expected to be redeemed and repaid in late October. Completion of the Placement and the issuance of the Common Shares issuable upon conversion or redemption of the Debentures (collectively, the "Transaction") is subject to certain conditions, including, without limitation, the receipt of all necessary regulatory and shareholder approvals, including the approval of the Toronto Stock Exchange.

Stuart Olson will be holding a special meeting of shareholders in late September to seek approval of the Transaction.

Stuart Olson has entered into voting support agreements with three of its major shareholders, which include Alberta Investment Management Corporation on behalf of certain of its clients and Letko, Brosseau & Associates Inc. pursuant to which each has committed to vote in favour of the Transaction. The voting support agreements collectively represent approximately 33% of the outstanding common shares of the Company.  

"We are pleased to have an agreement with a reputable and sophisticated portfolio manager like Canso Investment Counsel Ltd. Having Canso as a significant stakeholder represents a very strong endorsement of our business and our abilities to execute our growth strategies and to create value for all our stakeholders," said David LeMay, President and CEO of Stuart Olson.

CIBC Capital Markets acted as agent in connection with the Placement.

ABOUT STUART OLSON INC.

Stuart Olson Inc. provides general contracting and electrical building systems contracting in the public and private construction markets as well as general contracting, electrical, mechanical and specialty trades, such as insulation, cladding and asbestos abatement, in the industrial construction and services market. The Company operates office locations and projects throughout Western Canada, Ontario and the territories. In 2019 Stuart Olson was recognized as one of Alberta's Top Employers for the third consecutive year. Stuart Olson's common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "SOX" and "SOX.DB.A", respectively. www.stuartolson.com

Forward Looking Information

This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, statements relating to regulatory and shareholder approvals, the settlement of the Company's outstanding debentures, and timing of transactions contemplated. Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding Stuart Olson's financial position and the results of its operations as at the date hereof. By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that Stuart Olson's anticipated results will not be achieved. Although Stuart Olson believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in Stuart Olson's Annual Information Form filed with the securities regulatory authorities in Canada under Stuart Olson's profile at www.sedar.com. Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.

The forward-looking information in this press release is current to the date hereof, and is subject to change following such date. While Stuart Olson may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.

SOURCE Stuart Olson Inc.

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