ALGOMA CENTRAL CORPORATION Announces Closing of Bought Deal Financing

Jun 21, 2017



ST. CATHARINES, ONTARIO (June 21, 2017) Algoma Central Corporation (“Algoma” – is pleased to announce the closing of its previously announced offering of $75,000,000 aggregate principal amount of 5.25% convertible unsecured subordinated debentures (the “Debentures”) at a price of $1,000 per Debenture on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets, and including Scotia Capital Inc., TD Securities Inc., National Bank Financial Inc., GMP Securities L.P., Cormark Securities Inc. and Raymond James Ltd. (collectively, the “Underwriters”). Algoma has also granted the Underwriters an over-allotment option to purchase up to an additional $7,500,000 aggregate principal amount of Debentures at the same price exercisable in whole or in part at any time for a period of 30 days following closing.

The Debentures will trade on the Toronto Stock Exchange under the symbol “ALC.DB.A”.

The Debentures will mature on June 30, 2024 and bear interest at an annual rate of 5.25% payable semi-annually in arrears on June 30 and December 31 in each year, commencing December 31, 2017. At the holder's option, the Debentures may be converted into common shares of Algoma ("Shares") at any time prior to the close of business on the earlier of June 30, 2024 and the business day immediately preceding the date specified by Algoma for redemption of the Debentures. The conversion price will be $21.15 per Share, subject to adjustment in certain circumstances. Holders converting their Debentures will receive accrued and unpaid interest thereon to, but excluding, the date of conversion.

Algoma intends to use the net proceeds of the Offering to fund the redemption of its outstanding 6.00% convertible unsecured subordinated debentures due March 2018 (the “Existing Debentures”) and for general corporate purposes. Formal notice of Algoma’s intention to redeem the Existing Debentures will be delivered as soon as is practicable to the registered holders thereof in accordance with the terms and conditions of the trust indenture governing the Existing Debentures.

The securities offered have not been and will not be 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 registrations requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

About Algoma Central Corporation

Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes - St. Lawrence Waterway, including self-unloading dry-bulk carriers, gearless dry bulk carriers and product tankers. Algoma also owns ocean self-unloading vessels operating in international markets. Algoma provides ship management services for other ship owners. The Company is expanding into global dry-bulk markets with investments in businesses specializing in pneumatic cement carrying vessels and in short-sea dry-bulk shipping.

For further information please contact:

Ken Bloch Soerensen
President and Chief Executive Officer
+1 905-687-7885

  Peter D. Winkley, CPA, CA
  Vice President, Finance and CFO
  +1 905-687-7897