For Immediate Release
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES.
BFI CANADA INCOME FUND
ANNOUNCES CLOSING OF $374 MILLION OFFERING OF SUBSCRIPTION RECEIPTS
TORONTO, ONTARIO – January 5, 2005 – BFI Canada Income Fund (TSX: BFC.UN) announced today that it has successfully completed its previously-announced offering of 14,166,667 subscription receipts. In addition, the underwriters have exercised their option to acquire an additional 1,416,667 subscription receipts at the closing, resulting in total proceeds to the Fund of approximately $374 million.
The underwriters of the offering were CIBC World Markets Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., Scotia Capital Inc., Sprott Securities Inc. and First Associates Investments Inc.
The offering was undertaken in connection with the agreement between the Fund and IESI Corporation to combine their respective businesses (the “Transaction”), to create one of the largest non-hazardous solid waste management companies in North America. Pursuant to the Transaction, 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. The Transaction is expected to close on or about January 21, 2005, subject to satisfaction of various conditions, including unitholder approval and the receipt of all necessary regulatory approvals. A special meeting of unitholders of the Fund will be held on January 20, 2005 at the Gallery, Toronto Stock Exchange, 130 King Street West, Toronto, Ontario at 10:00 a.m. EST to approve the Transaction, among other things.
The proceeds of the offering will be held in escrow pending the closing of the Transaction. Upon release, the proceeds will be applied (together with the proceeds of new debt financing) to repay substantially all of IESI’s third party debt as well as indebtedness of BFI Canada Holdings Inc. used to fund its acquisition of the Ridge landfill, which closed on January 4, 2005.
The subscription receipts will trade on the Toronto Stock Exchange under the symbol “BFC.R” until the completion of the Transaction, at which time they will be automatically exchanged for units of the Fund. Following the exchange of subscription receipts for units, the former holders of the subscription receipts will be entitled as unitholders to receive distributions from the Fund. Holders of the former subscription receipts will also be entitled to receive an amount per subscription receipt, if any, equal to the per unit distribution paid or payable to the holders of the units in respect of all record dates occurring during the period from the offering closing date to the Transaction closing date, as if the subscription receipts had been converted to units immediately prior to such record dates. In no case will holders of subscription receipts be eligible to receive any amount in respect of the distribution to be paid on January 15, 2005 to unitholders of record on December 31, 2004.
If the Transaction fails to close by 5:00 p.m. (Toronto time) on March 1, 2005 or if the Transaction agreement is terminated at any earlier time (in either case, the "Termination Date"), Computershare Trust Company of Canada, as the escrow agent, and the Fund will return to the holders of subscription receipts, commencing on the third business day following the Termination Date, an amount equal to the issue price therefor and their pro rata entitlements to interest earned on such amount (less any withholding taxes applicable to non-resident holders). If the Transaction closing does not occur on or before March 1, 2005 because the parties have not received all necessary consents to the Transaction, the Fund may request that the Termination Date be extended to a date not later than March 31, 2005 (the "Extension Date"). If the Underwriters agree to extend the Termination Date but the Transaction closing does not occur on or before the Extension Date, the Fund will return to the holders of subscription receipts, commencing on the third business day following the Extension Date, an amount equal to (i) the issue price therefor and their pro rata entitlements to interest earned on such amount, plus (ii) an amount per subscription receipt equal to the per Unit distribution payable to unitholders relating to any record date occurring on or after March 1, 2005 to and including March 31, 2005 (less any withholding taxes applicable to non?resident holders).
About BFI Canada
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.
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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
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 statements” relating to the Fund and IESI Corporation 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.
The Fund 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 the Fund does not presently know of or that the Fund 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 the Fund’s renewal annual information form for the period ended December 31, 2003 filed with the Canadian securities regulatory authorities and in IESI Corporation’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 Corporation’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 the Fund undertakes no obligation to publicly update the forward-looking statements to reflect new information, subsequent events or otherwise.
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