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Mullen Group Income Fund and Mullen Group Ltd. announce closing of plan of arrangement and convertible debenture offering

Posted on: Friday, 1 May 2009, 14:02 CDT

OKOTOKS, AB, May 1 /PRNewswire-FirstCall/ - (TSX-MTL.UN) Mullen Group Income Fund ("Mullen" or the "Fund") and Mullen Group Ltd. ("Mullen Group") announced today that they have closed their previously announced conversion of the Fund to a corporation (the "Reorganization") pursuant to a plan of arrangement under the Business Corporations Act (Alberta).

The Reorganization was approved at the annual and special meeting of holders of trust units ("Units") of the Fund and holders of Class B limited partnership units ("MCLP B Units") of Mullen Co. Limited Partnership (collectively, "Securityholders") held on April 29, 2009, with 86% of the votes being cast in favour of the Reorganization. On April 29, 2009, the Alberta Court of Queen's Bench granted the final Order required in connection with the Reorganization.

Pursuant to the Reorganization, Securityholders received one common share ("Mullen Group Share") of Mullen Group in exchange for each Unit or MCLP B Unit held.

All of the members of the Board of Directors and the senior officers of Mullen Group Inc. are continuing as the directors and officers of Mullen Group. Trading of the Mullen Group Shares on the Toronto Stock Exchange is expected to commence on or about May 6, 2009 under the symbol "MTL", subject to the approval of the Toronto Stock Exchange.

Convertible Subordinated Debentures

Mullen Group also announced today the completion of Mullen's previously announced convertible subordinated debenture offering. Mullen Group has issued by way of a private placement, $125 million aggregate principal amount of 10% convertible subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering"). The proceeds of the Offering will be used by Mullen Group for working capital and for general corporate purposes.

Fairfax Financial Holdings Limited and/or affiliates of Fairfax Financial Holdings Limited subscribed for $65 million of Debentures and insiders and employees of Mullen Group, including their extended families and friends, and members of the Mullen family subscribed for approximately $17 million of Debentures pursuant to the Offering. In addition, through a syndicate of agents led by TD Securities Inc., the Fund issued $43 million of Debentures to accredited investors.

The Debentures will mature on July 1, 2018 and bear interest at 10% per annum payable quarterly commencing June 30, 2009. The Debentures and the Mullen Group Shares issuable on conversion thereof will be subject to a hold period of four months and one day from the closing date.

Credit Facility

Mullen Group also announces that it has obtained a $75 million 3 year term facility from the Royal Bank of Canada.

The Mullen Group is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and as one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen Group has strong business relationships and industry leadership. Additional information is available on our website at www.mullen-group.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Fund or Mullen Group within the United States. The securities of the Fund and/or Mullen Group have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the Debentures may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under 1933 Act and applicable state securities laws or an exemption from such registration is available.

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "objective", "will", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning the use of proceeds of the Offering and the approval of the Toronto Stock Exchange.

The forward-looking statements and information are based on certain key expectations and assumptions made by Mullen Group, including the timing of receipt of regulatory approval. Although Mullen Group believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Mullen Group can give no assurance that they will prove to be correct.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the current financial markets, the service and energy industry in general; and the failure to obtain required regulatory approvals. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release concerning these times.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Mullen Group are included in reports of the Fund on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) of the Fund. The forward-looking statements and information contained in this press release are made as of the date hereof and Mullen Group undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities law. Mullen Group relies on litigation protection for "forward-looking" statements.

SOURCE Mullen Group Income Fund

Source: PR Newswire

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