Parkland Income Fund Announces $45 Million Bought Deal Convertible Debenture Offering

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RED DEER, ALBERTA--(Marketwire - Dec. 6, 2010) -


Parkland Income Fund ("Parkland" or the "Fund") (TSX:PKI.UN), Canada's largest independent fuel distributer and marketer, today announced that it has entered into an agreement with a syndicate of underwriters co-led by Scotia Capital Inc. and RBC Capital Markets and including CIBC World Markets Inc., TD Securities Inc., HSBC Securities (Canada) Inc., Canaccord Genuity Corp., Dundee Securities Inc. and PI Financial Corp., who will sell to the public on a bought deal basis $45 million principal amount of convertible unsecured subordinated debentures bearing interest at 5.75% (the "Debentures") at a price of $1,000 per Debenture. All financial figures referred to in this press release are in Canadian dollars.

Parkland will use the proceeds of this financing to: (i) repay outstanding indebtedness; (ii) finance current and future growth opportunities that are expected to include a combination of organic growth initiatives and acquisitions; and (iii) for general corporate purposes.

Closing of the Offering is expected to occur on or about December 21, 2010.

The Debentures will bear interest from the date of issue at 5.75% per annum, payable semi-annually in arrears on June 30 and December 31, commencing June 30, 2011.

As previously disclosed, the Fund intends to complete a conversion to a corporation to be named Parkland Fuel Corporation (the "Corporation") on or about December 31, 2010. Upon the conversion of the Fund to a corporation, the Debentures will become debentures of the Corporation having substantially the same terms as the Debentures without the consent of any holders of the Debentures.

The Debentures have a maturity date of December 31, 2015 (the "Maturity Date"). The Debentures will be convertible into fully paid and non-assessable common shares of the Corporation (the "Common Shares") at a conversion price of $18.00 per Common Share (the "Conversion Price") at the holder's option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by Parkland for redemption of the Debentures. This represents a conversion rate of approximately 55.5556. Common Shares for each $1,000 principal amount of Debentures. If for any reason the conversion of the Fund into a corporation does not occur on or by January 1, 2011, the Debentures will be convertible into fully paid and non-assessable trust units of the Fund at the same Conversion Price.

The Debentures will not be redeemable before December 31, 2013. On or after December 31, 2013 and prior to December 31, 2014, the Debentures may be redeemed in whole or in part at the option of Parkland with not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount thereof plus accrued and unpaid interest to, but excluding, the date for redemption, provided that the volume-weighted average trading price of the Common Shares on the Toronto Stock Exchange for the 20 consecutive days ending five days prior to the date which the notice of redemption is given is not less than 125% of the conversion price. On or after December 31, 2014 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part at the option of Parkland on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest.

The Convertible Debentures will be issued by way of a short form prospectus to be filed with the securities regulatory authorities in each of the provinces of Canada excluding Quebec. The Offering is subject to customary conditions and receipt of all necessary regulatory and stock exchange approvals.

The Convertible Debentures offered have not been registered under the U.S. 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 requirements. This press 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 in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Cautionary Statement Regarding Forward-Looking Information and Statements

Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Parkland. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "projected", "anticipates", "estimates", "continues", or similar words and include but are not limited to, statements regarding the accretive effects of acquisitions and the anticipated benefits of acquisitions. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in the Fund's annual report, annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause the Fund's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and the Fund does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

About Parkland Income Fund

Parkland Income Fund is Canada's largest independent fuel distribution and marketing company, delivering fuel products from regional refineries to retail, commercial and reseller customers coast-to-coast. Through its network of 620 retail locations, 77 commercial branches, 71 cardlock locations and through wholesale agreements, the Fund distributes 3.4 billion litres of fuel annually, representing 4.7% of the total Canadian fuel market (market share in some regions of operation is higher). 

Parkland currently distributes fuel to retail customers under its Fas Gas Plus, Fas Gas and Race Trac brands as well as through distribution agreements with 293 Esso locations. Parkland also supplies propane, bulk fuel, heating oil, lubricants, industrial fluids and associated services to commercial and industrial customers across Canada under the Neufeld, United Petroleum, Columbia Fuels, Bluewave Energy, and Great Northern Oil brands. 

Parkland offers investors a balance of yield and growth. The Fund is delivering value to unitholders by growing fuel volumes through carefully selected acquisitions, working closely with suppliers to achieve a material cost advantage and achieving greater efficiency through operational excellence. 

Parkland units and convertible debentures trade on the Toronto Stock Exchange (TSX) under the symbols PKI.UN and PKI.DB. For more information visit


Contact Information

For investor and media inquiries, or to be added
to the email news alert service, please contact:
Parkland Income Fund
Tom McMillan, Investor Relations Manager
Parkland Income Fund
Mike W. Chorlton
President and CEO
Parkland Income Fund
Ken J. Grondin
Senior Vice President and CFO