Relief granted from ss. 224(1)(b) of the Regulation, as varied by the Rule cited below,to underwriters connected to the issuer - Issuer not in financial difficulty.
Regulation made under the Securities Act R.R.O. 1990, Reg. 1015, as am., ss. 219,233 and 224(1)(b).
In the Matter of the Limitations on a Registrant Underwriting Securities of a RelatedIssuer or Connected Issuer, (1997) 20 OSCB 1217 as amended.
Proposed Multi-jurisdictional Instrument 33-105 - Underwriting Conflicts (1998) 21OSCB 781.
R.S.O. 1990, AS AMENDED (the "Act")
IN THE MATTER OF
ASTRAL MEDIA INC.
IN THE MATTER OF
SCOTIA CAPITAL INC., CIBC WORLD MARKETS INC., GRIFFITHS MCBURNEY & PARTNERS, NATIONAL BANK FINANCIAL INC.,NEWCREST CAPITAL INC., RBC DOMINION SECURITIES INC., TD SECURITIES INC., YORKTON SECURITIES INC., AND TRILON SECURITIES CORPORATION
(Section 233 of the Regulation)
UPON the application of Astral Media Inc. ("Astral") on behalf of Scotia Capital Inc.,CIBC World Markets Inc., Griffiths McBurney & Partners, National Bank Financial Inc.,Newcrest Capital Inc., RBC Dominion Securities Inc., TD Securities Inc., YorktonSecurities Inc. and Trilon Securities Corporation (collectively, the "Underwriters") to theOntario Securities Commission (the "Commission") for an order pursuant to section 233of the Regulation (the "Regulation") under the Act that the Underwriters are exempt fromthe requirements contained in section 224(1)(b) of the Regulation, as varied by a rule ofthe Commission entitled In the Matter of the Limitations on a Registrant UnderwritingSecurities of a Related Issuer or Connected Issuer, (1997), 20 OSCB 1217 as amended(the "Rule") in respect of the distribution (the "Offering") by Astral of Class A Non-VotingShares of Astral by way of a short form prospectus (the "Prospectus");
AND UPON considering the application and the recommendation of the staff of theCommission;
AND UPON Astral having represented to the Commission that:
1. Astral was continued under the Canada Business Corporations Act by Certificateof Continuance dated August 27, 1986.
2. Astral is a reporting issuer under the Act and is not in default of any requirementunder the Act.
3. Astral has filed a preliminary short form prospectus (the "Preliminary Prospectus")with the Commission des valeurs mobilières du Québec and with the securitiesregulatory authorities in each of the other provinces of Canada in order to qualifythe Offering of 2,500,000 Class A Non-Voting Shares at a price of $38.50 pershare.
4. Pursuant to the terms of an underwriting agreement between Astral and theUnderwriters, the Underwriters have agreed to act as underwriters in connectionwith the Offering; the proportionate share of the Offering to be underwritten by eachof the Underwriters is as follows:
|Proportionate Share of
|Scotia Capital Inc.||28%|
|CIBC World Markets Inc.||15%|
|Griffiths McBurney & Partners||10%|
|National Bank Financial Inc.||10%|
|Newcrest Capital Inc.||10%|
|RBC Dominion Securities Inc.||10%|
|TD Securities Inc.||10%|
|Yorkton Securities Inc.||5%|
|Trilon Securities Corporation||2%|
5. Timothy R. Price, a Director of Astral, is Chairman of the Board of Trilon FinancialCorporation, an affiliate of Trilon Securities Corporation ("Trilon").
6. Astral has an agreement with a syndicate of financial institutions (the "Syndicate")for a credit facility pursuant to which $110 million is outstanding (the "CreditFacility"); each of Scotia Capital Inc., RBC Dominion Securities Inc., TD SecuritiesInc. and National Bank Financial Inc. (together with Trilon, the "Non-IndependentUnderwriters") is controlled by a Canadian chartered bank which is a member of theSyndicate - The Bank of Nova Scotia, Royal Bank of Canada, The Toronto-Dominion Bank and National Bank of Canada respectively (the "Banks").
7. Astral is a "connected issuer" (within the meaning of subsection 219(1) of theRegulation) to the Non-Independent Underwriters thus the Syndicate does notcomply with the proportionate requirements of clause 224(1)(b) of the Regulationas varied by the Rule; Astral is not a "related issuer" to the Underwriters (within themeaning of subsection 219(1) of the Regulation).
8. The Bank of Nova Scotia, Royal Bank of Canada, The Toronto-Dominion Bank andNational Bank of Canada are responsible for 17.07%, 21.95%, 14.63% and 21.95%respectively, of the sums borrowed under the Credit Facility, representing anamount of $83,200,000 as of August 23, 2000; the net proceeds of the Offering willbe used to reduce Astral's indebtedness under the Credit Facility.
9. The Banks did not participate in the decision to make the Offering nor in thedetermination of the terms of the Offering or the use of proceeds thereof.
10. The Non-Independent Underwriters will not benefit in any manner from the Offeringother than the payment of their fee in connection with the Offering.
11. CIBC World Markets Inc., Griffiths McBurney & Partners, Newcrest Capital Inc. andYorkton Securities Inc. are independent of the lenders under the Credit Facility andthe aggregate proportionate share of the Offering to be underwritten by them isequal to 40%.
12. The disclosure required by Schedule C to the Proposed Multi-jurisdictionalInstrument 33-105 entitled Underwriting Conflicts (1998) 21 OSCB 781 (the"Proposed Instrument") is contained in the Preliminary Prospectus and theProspectus.
13. Astral is not a "related issuer" (as that term is defined in the Proposed Instrument)of any of the Underwriters nor is Astral a "specified party" (as that term is definedin the Proposed Instrument).
14. Astral is in good financial condition and is not under any immediate financialpressure to complete the Offering.
15. The certificate in the Preliminary Prospectus and the Prospectus is signed by eachof the Underwriters as required by the Act.
AND UPON the Commission being satisfied that to do so would not be prejudicialto the public interest;
IT IS ORDERED pursuant to section 233 of the Regulation that the Underwriters areexempt from the requirements contained in section 224(1)(b) of the Regulation as variedby the Rule, in respect of the Offering.
September 5th, 2000.
"J.A. Geller" "R. Stephen Paddon"