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SNC - Lavalin Group Inc. et al. - MRRS Decision
Headnote
Issuer is a connected issuer, but not a related issuer, in respect of registrants that are underwriters in proposeddistribution of securities by the issuer - Underwriters exempt from the independent underwriter requirement in thelegislation provided that issuer not in financial difficulty.
Regulations Cited
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 219(1), 224(1)(b) and 233.
Rules Cited
Proposed Multi-Jurisdictional Instrument 33-105 Underwriting Conflicts (1998),
21 OSCB 788.
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF THE PROVINCES OF BRITISH COLUMBIA, ALBERTA, ONTARIO,
QUÉBEC AND NEWFOUNDLAND
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
RBC DOMINION SECURITIES INC., BMO NESBITT BURNS LTD.,
SCOTIA CAPITAL INC., NATIONAL BANK FINANCIAL INC.
AND SNC-LAVALIN GROUP INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (a "Decision Maker") in each of the Provincesof British Columbia, Alberta, Ontario, Québec, and Newfoundland (the "Jurisdictions") has received an application fromRBC Dominion Securities Inc. ("RBCDS"), BMO Nesbitt Burns Ltd., Scotia Capital Inc. and National Bank Financial Inc.(collectively the "Filer") for a decision under the securities legislation of the Jurisdictions (the "Legislation") that therequirement contained in the Legislation regarding acting as an underwriter in connection with a distribution of securitiesof a connected issuer or the equivalent shall not apply to RBC Dominion Securities Inc., BMO Nesbitt Burns Ltd., ScotiaCapital Inc. and National Bank Financial Inc. with respect to the proposed offering of unsecured debentures due inSeptember 2010 by SNC-Lavalin Group Inc.
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"),the Commission des valeurs mobilières du Québec is the principal regulator for this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. SNC-Lavalin Group Inc. (the "Issuer") was incorporated pursuant to the Canada Business Corporations Act onMay 18, 1967. The Issuer's head office is located at 455 René Lévesque Blvd. West, Montreal, Québec HZ21Z3.
2. The Issuer is a reporting issuer in all provinces of Canada. The Issuer's outstanding Common Shares are listedon The Toronto Stock Exchange.
3. The proposed Offering will consist in unsecured debentures due in September 2010. The credit rating givento the debentures by approved credit rating agencies is favourable (BBB (high) for CBRS Inc. and BBB forDBRS.
4. The Issuer will enter into an Underwriting Agreement with RBCDS, BMO Nesbitt Buns Ltd., Scotia Capital Inc.and National Bank Financial Inc. (collectively the "Underwriters") in connection with the Offering.
5. The Issuer will file a Short-Form Preliminary Prospectus with the Commission and other similar authorities onAugust 23, 2000. The Offering consists in unsecured debentures due in September 2010.
6. The Underwriters, pursuant to the Underwriting Agreement, will hold the totality of the Offering. None of theUnderwriters will be independent, as such term is defined in the Legislation.
7. The Issuer has entered into a Master Credit Agreement with various financial institutions, including theCanadian chartered banks (the "Banks") which are affiliates of RBCDS, BMO Nesbitt Burns Ltd., Scotia CapitalInc. and National Bank Financial Inc. The Banks are not part of a banking syndicate. As of August 18, 2000,from the amount granted to SNC Lavalin Group Inc. of 918 067 233 $, an amount of 242 244 959 $ has beenalready used. In addition, the net proceeds of the Offering will not be used to reduce any indebtedness.
8. The Issuer may be considered a "connected issuer" or the equivalent to the Filer pursuant to the Legislationwith RBCDS, BMO Nesbitt Buns Ltd., Scotia Capital Inc. and National Bank Financial Inc. Furthermore, theUnderwriters will not comply with the proportional requirements of the Multi-Jurisdictional Instrument 33-105.
9. The nature of the relationship between the Issuer, the Underwriters and the Banks will be described in theProspectus.
10. The Prospectus will contain a certificate signed by each Underwriter in accordance with Item 20 of AppendixB of National Policy 47.
11. The net proceeds of the Offering will be used for general corporate purposes and will not be used to repay theBanks.
12. The Issuer is not a "related issuer" or the equivalent of any of the Underwriters for purposes of the Multi-Jurisdictional Instrument 33-105. However, by virtue of the Master Credit Agreement described above and theportion of indebtedness owed thereunder too each of the Banks, the Issuer may, in connection with the Offeringbe a "connected issuer" or the equivalent of the Underwriters applicants for the purposes of the Multi-Jurisdictional Instrument 33-105.
13. The decision to proceed with the Offering, including the determination of the terms of distribution, will be madethrough negotiation between the Issuer and the Underwriters without involvement of the Banks. The Applicantswill participate as a group in such negotiations and in the due diligence process.
14. The Underwriters will not receive any benefit from the Offering other than payment of their fees.
15. The Issuer is not in financial difficulty and is not under any immediate financial pressure to undertake theOffering. The Issuer is not a "specified party" as defined in the proposed Multi-Jurisdictional Instrument 33-105.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that the Filer is exempt from the requirementsof applicable regulations in relation with the requirements contained in the Legislation regarding acting as an underwriterin connection with a distribution of securities of a connected party in respect of the Offering with the following conditions:
1. The Issuer shall disclose in its prospectus the information required by Appendix C ofMulti-Jurisdictional Instrument 33-105.
2. The prospectus shall describe the relation between the Issuer and the Underwriters. The informationshall appear in bold text on the face page and in the body of the prospectus.
September, 8th, 2000.
"Jean Lorrain"