Take-over bid -- relief from sections 95 to 100 and section 101 of the Securities Act (Ontario) -- purchase and sale of Fund assets constitutes take-over bid and triggers early warning requirements -- exemptions from take-over bid requirements not available for very technical reasons -- no informational benefit from offeror complying with early warning requirements -- exemptive relief granted from take-over bid and early warning requirements.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 95 to 100, 101, 104(2)(c), 93(1)(d) and s. 184 of the Regulations.
May 1, 2007
IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990,
CHAPTER S.5, AS AMENDED
(the "Securities Act")
IN THE MATTER OF
THE ACQUISITION OF THE TRUST ASSETS OF
GREAT LAKES CARBON INCOME FUND BY
OXBOW GLC CANADA ACQUISITION ULC
(Clause 104(2)(c) of the Securities Act)
UPON the application (the "Application") of Oxbow GLC Canada Acquisition ULC ("Oxbow ULC") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of Securities Act exempting Oxbow ULC from the requirements of sections 95 through 100 (the "Take-over Bid Requirements") and section 101 (the "Early Warning Requirements") of the Securities Act, and the related provisions of the regulations set out in the Act (collectively, the "Take-over Bid and Early Warning Requirements"), in connection with the proposed acquisition (the "Oxbow Transaction") of all of the assets of Great Lakes Carbon Income Fund (the "Fund") by Oxbow ULC pursuant to a business acquisition agreement (the "Business Acquisition Agreement") dated March 28, 2007 between the Fund and the Oxbow Entities;
AND UPON considering the Application and the recommendation of the staff of the Commission;
AND UPON Oxbow ULC having represented to the Commission as follows:
1. Oxbow ULC is a wholly-owned indirect subsidiary of Oxbow Carbon & Minerals Holdings, Inc. ("Oxbow", and together with Oxbow ULC, the "Oxbow Entities") and was incorporated under the laws of the Province of Nova Scotia on March 15, 2007 solely for the purpose of effecting the Oxbow Transaction. Oxbow is part of the Oxbow Group, a privately held energy company based in West Palm Beach, Florida, USA. Neither of the Oxbow Entities are reporting issuers in Canada.
2. The Fund is a trust formed pursuant to a Declaration of Trust dated June 25, 2003, as amended and restated on July 28, 2003 and August 11, 2003, and as further amended on May 10, 2004 and March 13, 2006. The Fund's registered office is located at Suite 3000, 79 Wellington Street West, Box 270, Toronto, Ontario, Canada M5K 1N2.
3. The Fund is, and has been for the last twelve months, a reporting issuer (or equivalent) under the securities laws of each of the provinces and territories of Canada, and is not on the list of reporting issuers in default in any of those jurisdictions.
4. As of March 29, 2007, the outstanding capital of the Fund consisted of 37,672,622 trust units.
5. The assets of the Fund include all of the 37,672,622 outstanding common shares of Carbon Canada Inc. ("Carbon Canada") and $258,434,181.29 principal amount of 16% unsecured, subordinated notes issued by Huron Carbon ULC (collectively, the "Trust Assets").
6. On March 28, 2007, the Oxbow Entities and the Fund entered into the Business Acquisition Agreement whereby Oxbow ULC would acquire all of the Trust Assets. Upon completion of the purchase and sale of the Trust Assets, the Fund would terminate its existence and distribute its remaining assets, being principally the cash received in the Oxbow Transaction, to its unitholders.
7. By order of the Commission dated March 19, 2004, Carbon Canada was deemed a reporting issuer under section 83.1 of the Securities Act.
8. As a result of Carbon Canada being a reporting issuer, the proposed purchase by Oxbow ULC of the shares of Carbon Canada as part of the Oxbow Transaction is a "take-over bid" for purposes of the Take-over Bid Requirements for which no exemption is available.
9. In addition, because Carbon Canada is a reporting issuer, the proposed purchase by Oxbow ULC of the shares of Carbon Canada as part of the Oxbow Transaction would also result in the acquisition of beneficial ownership of, or the power to exercise control or direction over, 10% or more of the issued voting or equity securities of any class of a reporting issuer thereby requiring immediate public disclosure for purposes of the Early Warning Requirements for which no exemption is available.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED pursuant to clause 104(2)(c) of the Securities Act that the Take-over Bid and Early Warning Requirements do not apply to the Oxbow Transaction.