Vector responds to IMP Group press release and announces $45 million equity
financing
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The special committee of independent directors formed in response to the IMP Group proposal (the "Special Committee") does not believe that the partial insider bid, as currently proposed by IMP Group, is in the best interest of the Corporation given that (among other things): (i) the proposed offer is a partial bid that would enable IMP Group to acquire control of the Corporation, but is not being made for all of the outstanding common shares held by Vector's minority shareholders; (ii) the proposed offer would only provide partial liquidity to shareholders but would reduce the liquidity of Vector's shares after the offer due to fewer shares being available for trading; (iii) the floor price of
Pursuant to the Amended and Restated Shareholder Rights Plan ratified by the shareholders of the Corporation at the May, 2009 Annual and Special Meeting, IMP Group will be restricted from acquiring any Vector common shares pursuant to the proposed offer unless (among other things) the bid is left open for not less than 60 days. Furthermore, more than fifty percent (50%) of the then outstanding Vector common shares held by shareholders other than IMP Group must be tendered to the bid and not withdrawn. Should this condition be met, IMP Group must make a public announcement of this fact and extend the bid for a further period of not less than ten business days to allow those shareholders who did not originally tender to the bid to do so.
The Special Committee has in a confidential manner begun to explore alternatives to the partial insider bid that may provide superior value to Vector shareholders. The reference in the IMP Group press release to "indicative offers recently received to purchase Vector shares (being) below the ...price level being offered by IMP" appears to be a reference to an unsolicited non-binding expression of interest the Corporation received approximately four months ago (before the Special Committee was struck) which was rejected on the basis that the price of
IMP Group currently exercises control and direction over 14,054,214 Vector common shares, representing approximately 37.3% of the total outstanding common shares of the Corporation. Vector initially received a letter from IMP Group on
On
Following careful consideration and deliberation by the Special Committee, with input from its financial advisors, and by the Board of Directors concerning the proposed offering and the substance of the IMP Group announcement, the Board of Directors has determined that it is in the best interest of the Corporation to proceed with the offering as (among other things) it is intended to broaden the shareholder base, enhance liquidity, repay debt and enhance the ability of the Corporation to execute on the growth strategy that has been agreed to by the full Board. To this end, the Corporation has entered into an agreement with TD Securities Inc. and Dundee Securities Corporation, on their behalf and on behalf of a syndicate of underwriters including CIBC, Scotia Capital Inc. and Versant Partners Inc. (collectively, the "Underwriters"), providing for the purchase by the Underwriters of 7,100,000 common shares in the capital of the Corporation (the "Shares"), at a price of
Vector is an independent provider of aviation repair and overhaul services. Through facilities in
This news release contains certain information that may constitute forward looking information within the meaning of applicable securities laws. These statements are based on current expectations related to the markets in which Vector operates, its financial condition and its general business. By their very nature, forward-looking statements involve inherent risks and uncertainties that the expectations will not be achieved. Indeed, the forward-looking statements herein may differ materially from actual results or events. While Vector considers the assumptions on which these statements are made to be reasonable, based on information currently available to it, they may prove to be incorrect and readers are cautioned, therefore, not to place undue reliance on these statements as a number of important factors could cause actual results to differ materially from those expressed in such forward-looking statements.
These factors include, without limitation, global and local political and economic factors and future demand for Vector's services. Readers should also refer to Vector's continuous disclosure materials filed with Canadian Securities Regulatory Authorities for additional information with respect to certain of these risk factors. A discussion of risk factors is contained in Vector's 2008 Annual Report which is available on Vector's website and on SEDAR. Readers should not place undue importance on forward looking information and should not rely upon this information as of any other date. While Vector may elect to, it is under no obligation and does not undertake to update or revise this information at any particular time, except as required by law.
For further information: Declan O'Shea, President and CEO, Toronto, Ontario, Telephone: (416) 640-2115, Website: www.vectoraerospace.com; Randal L. Levine, Senior Vice-President and Chief Financial Officer, Toronto, Ontario, Telephone: (416) 640-2120
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