AltaGas Income Trust Announces Trust Unit Offering
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. WIRE SERVICES/
CALGARY--(CCNMatthews - May 27) - AltaGas Income Trust ("AltaGas")
(TSX:ALA.UN) announced today that it has filed a preliminary short form
prospectus with the securities commissions in each of the provinces of Canada
with respect to the issue of Trust Units. AltaGas intends to raise
approximately $75 million from the offering which is anticipated to close
during the week of June 7, 2004. The syndicate of Underwriters is lead by RBC
Capital Markets and Clarus Securities Inc., and includes BMO Nesbitt Burns
Inc., Scotia Capital Inc., CIBC World Markets Inc., National Bank Financial
Inc., Canaccord Capital Corporation and Peters & Co. Limited. AltaGas has
also granted the Underwriters an over-allotment option to purchase up to an
additional 10 percent of the issue, exercisable, in whole or in part, within
30 days following the date of closing.
The net proceeds attributable to the sale of Trust Units will be used to
reduce bank indebtedness, which may be redrawn and used for general corporate
purposes including AltaGas' ongoing capital program, the funding of the
Edmonton Ethane Extraction Plant acquisition announced on March 18, 2004 and
Commenting on the offering, David W. Cornhill, Chairman and Chief Executive
Officer of AltaGas Ltd., administrator of AltaGas, said, "This unit offering,
our first since our conversion into an income trust on May 1, 2004, will
reduce our debt to total capitalization ratio to within our new target range
of 45 to 50 percent. With a considerably stronger balance sheet and
predictable, long term cash flows generated by our diversified asset base we
will continue to be positioned to take advantage of attractive investment
opportunities as they arise."
AltaGas Income Trust will commence monthly distributions on June 15, 2004 to
holders of Trust Units and Exchangeable Securities of record on May 25, 2004.
The amount of the distribution on that date will be $0.15 for each Trust Unit
and each Exchangeable Security. It is expected that purchasers of Trust Units
under this offering will be eligible to receive the anticipated July 15, 2004
Enbridge Inc. (Enbridge) is not participating in this offering of Trust
Units. Upon completion of the offering Enbridge is expected to hold a fully
diluted ownership interest of approximately 36 percent.
AltaGas announced yesterday that it has executed a letter of intent to
purchase the business of PremStar Energy Canada Ltd. and its subsidiaries
ECNG Inc. and Energistics Group Inc. for approximately $22.0 million payable
by way of 993,789 Trust Units issued from AltaGas Income Trust treasury plus
approximately $1.2 million cash. The transaction is conditional on the
execution of a purchase and sale agreement, which is expected to occur prior
to July 1, 2004.
AltaGas moves energy from its source to the end user, adding value through
the process. The Trust has assets totaling almost $950 million and a market
capitalization of approximately $900 million. Its steadily expanding asset
base today includes natural gas gathering and processing facilities,
interests in ethane and natural gas liquids extraction plants, and
transmission pipelines. AltaGas distributes natural gas to Alberta customers
through AltaGas Utilities Inc., to customers in the Northwest Territories
through the Ikhil Gas Project and distributes gas in Nova Scotia through its
interest in Heritage Gas Limited. The Trust provides energy services to
customers, including marketing of natural gas and natural gas liquids and
sale of power from its power purchase based arrangements.
AltaGas' Trust Units are listed on the Toronto Stock Exchange under the
symbol ALA.UN. The Trust is included in the S&P/TSX Capped Income Trust Index
and the S&P/TSX Capped Energy Trust Index.
This news release does not constitute an offer to sell securities, nor is it
a solicitation of an offer to buy securities, in any jurisdiction. All sales
will be made through registered securities dealers in jurisdictions where the
offering has been qualified for distribution. The Trust Units offered are
not, and will not be, registered under the securities laws of the United
States of America, nor any State thereof and may not be sold in the United
States of America absent registration in the United States or the
availability of an exemption from such registration.
When used in this press release, the words "anticipate", "estimate", and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks, uncertainties and assumptions that
could cause actual results to differ materially from those contemplated in
the forward looking statements. These risks and uncertainties include
operating performance, regulatory and environmental issues, weather and
economic conditions, competition and financing availability. For additional
information on these and other factors see the reports filed by AltaGas with
Canadian securities regulators. AltaGas disclaims any intention or obligation
to update or revise any forward looking information whether as a result of
new information or future event.