SERVICE SECTOR / Hartland Pipeline Services Announces the Purchase of
BFC Pipelines & Completion of the $110 Million Debt Facility
HARTLAND PIPELINE SERVICES LTD.
TSE SYMBOL: HAR
SEPTEMBER 21, 1998
CALGARY, ALBERTA--
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR
THROUGH ANY SERVICES HAVING U.S. PARTICIPATION.
Brian J. Murray, CEO and Mark A. Breakell, CFO of Hartland
Pipeline Services Ltd. are pleased to announce that Hartland has
completed the purchase of BFC Pipelines and has completed a $110
million financing underwritten by Bankers Trust and arranged by BT
Alex. Brown Canada Incorporated.
The details of the $110 million secured facility are as follows:
(i)$25 million Operating Line / Revolving Credit, 5-year term;
(ii)$35 million, 5-year term loan with annual repayments of $7
million;
(iii)$50 million, 6-year term loan with annual repayments of $0.5
million and a bullet payment of $47 million in year 6.
The proceeds from the long-term portion of the facility will be
used as follows:
(i)Completion of the acquisition of the BFC Pipelines division
(formerly known as Banister / Majestic Pipelines) from BFC
Construction Corporation for $67.5 million - $50 million in cash,
$10 million in Hartland common shares, and a $7.5 million
Convertible Debenture with a 5-year maturity and a 4.5 percent
coupon;
(ii)Consolidate and repay existing long-term debt of $19.8
million;
(iii)The balance will be used to supplement working capital.
The effective date of the BFC Pipeline acquisition is May 1, 1998.
The BFC Pipeline acquisition gives Hartland revenues and
additional contract backlog totalling approximately $419 million
over the next two years. Hartland's total estimated small, medium
and large bore backlog over the next two years is in excess of
$530 million.
Mr. Breakell reports, "This financing allows Hartland to meet its
current operating objectives with flexibility to pursue additional
synergistic acquisition opportunities".
Hartland serves a broad client base of senior Canadian oil and
natural gas producers and large pipeline companies. Hartland's
vertically integrated operations include fabrication, installation
and construction of gathering systems and small to large bore oil
and gas pipelines, environmental reclamation services and
horizontal drilling. Hartland's strategic objective is to become a
full service provider of pipeline construction solutions to the
North American gathering and pipeline construction markets.
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