ShawCor Announces Financing Arrangements to Eliminate Dual Class Share Structure

(TSX: SCL.A, SCL.B)

TORONTO, Feb. 26, 2013 /PRNewswire/ - ShawCor Ltd. is providing an update today regarding its financing arrangements in connection with the proposed elimination of ShawCor's dual class share structure (the "Arrangement") which will be the subject of a shareholder vote at a special meeting scheduled to be held on March 14, 2013 (the "Special Meeting").

In the Management Proxy Circular relating to the Special Meeting (which can be viewed at www.sedar.com or on the ShawCor website), ShawCor advised that it expected to finance the total cash needed to close the Arrangement (approximately $580 million) through a private placement of senior unsecured notes, an increase in its existing credit facility and from cash on hand.

ShawCor is announcing today that it has received commitments in respect of its unsecured senior note private placement in the amount of US$350 million, subject to confirmatory due diligence and the execution of definitive documents.  These senior notes will have terms ranging from 7 to 15 years, with a weighted average term of 10.4 years and a weighted average annual yield of approximately 3.65%.

ShawCor is also announcing today that it has received commitments from its existing lenders, subject to the execution of definitive documentation, to increase ShawCor's existing unsecured revolving credit facilities by US$100 million to US$250 million, to extend its term to five years and to reduce the rates of interest from those payable under the current facility.

Key financial covenants in both the senior note private placement and the amended credit facilities will require a maximum leverage ratio (total debt to EBITDA) of not more than 3.0 to 1.0 and a minimum interest coverage ratio (the sum of EBITDA plus rental payments to the sum of interest expense plus rental payments) of at least 2.5 to 1.0.

Mr. Bill Buckley, President and CEO of ShawCor Ltd. remarked, "We are quite pleased with both the high level of lender interest and with the favourable terms that we have secured in connection with our proposed financings.  The financing available to us under the senior notes private placement and the amended revolving credit facilities should not result in excessive leverage and is expected to support our growth agenda following the completion of the Arrangement."

Forward-Looking Information

This document includes certain statements that reflect management's expectations and objectives for the Company's future performance, opportunities and growth, which statements constitute forward-looking information under applicable securities laws.  Such statements, other than statements of historical fact, are predictive in nature or depend on future events or conditions. Forward-looking information involves estimates, assumptions, judgments and uncertainties.  These statements may be identified by the use of forward-looking terminology such as ″may″, ″will″, ″should″, ″anticipate″, ″expect″, ″believe″, ″predict″, ″estimate″, ″continue″, ″intend″, ″plan″ and variations of these words or other similar expressions.  Specifically, this document includes forward-looking information in respect of, among other things, the commitment of ShawCor's lenders and prospective note holders subject to confirmatory due diligence and definitive documentation.

Forward-looking information involves known and unknown risks and uncertainties that could cause actual results to differ materially from those predicted by the forward-looking information.  We caution readers not to place undue reliance on forward looking information as a number of factors could cause actual events, results and prospects to differ materially from those expressed in or implied by the forward looking information.   These statements of forward-looking information are based on assumptions, estimates and analysis made by management in light of its experience and perception of trends, current conditions and expected developments as well as other factors believed to be reasonable and relevant in the circumstances.  These assumptions include finalization of the Arrangement and the Company's ability to complete due diligence and to finalize and execute definitive documentation with its lenders and prospective note holders. The Company believes that the expectations reflected in the forward-looking information are based on reasonable assumptions in light of currently available information.  However, should one or more risks materialize or should any assumptions prove incorrect, the Company can give no assurance that such expectations will be achieved.

When considering the forward looking information in making decisions with respect to the Company, readers should carefully consider the foregoing factors and other uncertainties and potential events.  The Company does not assume the obligation to revise or update forward looking information after the date of this document or to revise it to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

The senior unsecured notes have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy these notes, nor shall there be any sale of these notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

SOURCE ShawCor Ltd.