Date: May 19, 2006
Source: Canada Newswire
Safety-Kleen HoldCo., Inc., announced today that it had approved a distribution to its stockholders of non- transferable subscription rights to purchase shares of common stock of Safety- Kleen. These rights will be distributed to stockholders of record as of a record date, which has not yet been determined. The board of directors of Safety-Kleen intends to set the record date shortly. Only stockholders of record will receive rights.
It is expected that each whole right will entitle the holder to purchase one share of common stock at a per share subscription price, which has not yet been determined. It is further expected that certain large stockholders will commit to purchase the shares of common stock which are not purchased by other holders of rights.
In addition, Safety-Kleen intends to allow the subscription price to be paid in cash or by exchange of senior subordinated term notes (known as the "take back notes") of Safety-Kleen. Proceeds of the offering, the size of which has not yet been determined but is currently contemplated to be $115 million, will be used to reduce Safety-Kleen debt.
"This will be another significant step toward completing Safety-Kleen's turnaround," said Frederick J. Florjancic, Jr., the company's president and chief executive officer. "We expect the rights offering to significantly reduce Safety-Kleen's annual interest expense and enhance Safety-Kleen's capital structure."
T.R. Tunnell, Safety-Kleen's executive vice president, corporate secretary and general counsel, said the company is announcing the proposed rights offering today to provide the market with adequate time to complete trades in the company's common stock.
"We are aware that many trades of our common stock and take back notes, which have been trading with the common stock as a unit, have not closed," Tunnell said. "In fact, the Loan Syndication and Trading Association recently issued a legal advisory encouraging holders of term notes to settle their trades in accordance with normative loan market practice. We support LSTA's position and strongly encourage beneficial owners of our common stock to take all appropriate action to settle trades as soon as possible."
"If beneficial owners do not settle trades prior to the record date," Tunnell added, "they will not receive rights from Safety-Kleen and would need to contact their trading counter-parties to obtain the rights."
No employee or representative of Safety-Kleen, its board of directors or any committee of its board of directors will make any recommendation to stockholders as to whether to exercise their subscription rights.
This press release is for informational purposes only and is not an offer to purchase, or a solicitation of an offer to sell, shares of Safety-Kleen's common stock. Stockholders should carefully read the offering memorandum, rights certificate and related materials when they are available because they will contain important information.
About Safety-Kleen
Safety-Kleen, a privately held company, is the leading oil recycling and re-refining, parts cleaner and industrial waste management services company in North America, with approximately 4,500 employees serving hundreds of thousands of customers in the United States, Canada and Puerto Rico.
John Kyte, +1-972-265-2030, for Safety-Kleen HoldCo., Inc.
More information: www.safety-kleen.com.
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