Algoma Central Corporation announces Substantial Issuer Bid

Nov 10, 2017


St. Catharines, Ontario (November 10, 2017) — Algoma Central Corporation (“Algoma”) (TSX:ALC) today announced that its Board of Directors has authorized a substantial issuer bid pursuant to which Algoma will offer to purchase for cancellation up to $20,000,000 of its common shares (the “Shares”) from Shareholders for cash. The Offer represents up to 1,454,545 Shares or approximately 3.7% of Algoma’s total issued and outstanding Shares.

The Offer will proceed by way of a "modified Dutch auction". Holders of Shares wishing to tender to the Offer will be entitled to do so pursuant to: (i) auction tenders in which they will specify the number of Shares being tendered at a price of not less than $13.75 and not more than $14.75 per Share in increments of $0.05 per Share, or (ii) purchase price tenders in which they will not specify a price per Share, but will rather agree to have a specified number of Shares purchased at the purchase price to be determined by auction tenders.

The purchase price to be paid by Algoma for each validly deposited Share will be based on the number of Shares validly deposited pursuant to auction tenders and purchase price tenders, and the prices specified by Shareholders making auction tenders. The purchase price will be the lowest price which enables Algoma to purchase Shares up to the maximum amount available for auction tenders and purchase price tenders, determined in accordance with the terms of the Offer. Shares deposited at or below the finally determined purchase price will be purchased at such purchase price. Shares that are not taken up in connection with the Offer, including Shares deposited pursuant to auction tenders at prices above the purchase price, will be returned to the Shareholders.

If the aggregate purchase price for Shares validly tendered pursuant to auction tenders and purchase price tenders is greater than the amount available for auction tenders and purchase price tenders, Algoma will purchase Shares from the holders of Shares who made purchase price tenders or tendered at or below the finally determined purchase price on a pro rata basis, except that “odd lot” holders (holders of less than 100 Shares) will not be subject to proration.

Algoma anticipates that the Offer will expire at 11:59 p.m. (Toronto time) on December 15, 2017, unless withdrawn or extended. The Offer will not be conditional upon any minimum number of Shares being tendered. The Offer will, however, be subject to other conditions and Algoma will reserve the right, subject to applicable laws, to withdraw or amend the Offer, if, at any time prior to the payment of deposited Shares, certain events occur.

Algoma plans to mail the formal offer to purchase, the issuer bid circular and other related documents containing the terms and conditions of the Offer, instructions for tendering Shares and the factors considered by Algoma, its Special Committee and its Board of Directors in making its decision to approve the Offer, among other things, on or around November 10, 2017. These documents will be filed with the applicable Canadian securities regulators and will be available free of charge on SEDAR at Shareholders should carefully read the offer to purchase, the issuer bid circular and the other related documents prior to making a decision with respect to the Offer.

Algoma’s Board of Directors has approved the making of the Offer. However, none of Algoma, its Special Committee or its Board of Directors, the dealer manager and the depositary makes any recommendation to any Shareholder as to whether to deposit or refrain from depositing any Shares under the Offer. Shareholders are urged to evaluate carefully all information in the Offer, consult their own financial, legal, investment and tax advisors and make their own decisions as to whether to deposit Shares under the Offer and, if so, how many Shares to deposit and at what price or prices.

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Shares. The solicitation and the offer to buy Shares will only be made pursuant to the formal offer to purchase, the issuer bid circular and other related documents.

GMP Securities L.P. has been retained by Algoma to act as financial advisor and dealer manager in connection with the Offer. In addition, GMP Securities L.P. has provided an opinion to Algoma that: (i) a liquid market, as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, exists for the Shares at the date hereof; and (ii) it is reasonable to conclude that, following the completion of the Offer, there will be a market for shareholders who do not tender to the Offer that is not materially less liquid than the market for Shares that exists at the time of making the Offer.

Algoma has also retained AST Trust Company (Canada) (“AST”) to act as depositary. Any questions or requests for information may be directed to AST, as the depositary for the Offer, at 1-800-387-0825 (Toll Free – North America) or 416-682-3860 (outside North America) or to GMP Securities L.P., as dealer manager for the Offer, at

About Algoma Central

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 dry-bulk vessels operating in international markets. Algoma also provides ship management services for other ship owners. Algoma has begun an expansion into international short-sea markets through it 50% interests in NovaAlgoma Cement Carriers and NovaAlgoma Short-Sea Carriers.

Forward-Looking Statements

Certain information included in this press release is forward-looking, within the meaning of applicable securities laws. Much of this information can be identified by looking for words such as “believe”, “expects”, “expected”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues” or similar words. In particular, this press release includes forward-looking statements pertaining to the terms and conditions of the Offer, the aggregate amount of Shares to be purchased for cancellation under the Offer and the expected expiration date of the Offer. Algoma 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 based on current information and expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. Forward looking statements contained in this press release are made as of the date hereof and are subject to change. Algoma assumes no obligation to revise or update forward looking statements to reflect new circumstances, except as required by law.

For further information please contact:

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

  Peter D. Winkley, CPA, CA
  Chief Financial Officer
  +1 905-687-7897