Exemption Orders (Discretionary)
RBC DOMINION SECURITIES INC.
2001 BCSECCOM 223
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - relief from the underwriter conflicts requirements to permit registrants to underwrite an offering of securities by a connected party, subject to certain conditions
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, s. 48
Securities Rules, B.C. Reg. 194/97, s. 78(2)(b)
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 Provinces of British Columbia, Alberta, Ontario, Québec, and Newfoundland (the "Jurisdictions") has received an application from RBC 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 the requirement contained in the Legislation regarding acting as an underwriter in connection with a distribution of securities of a connected issuer or the equivalent shall not apply to RBC Dominion Securities Inc., BMO Nesbitt Burns Ltd., Scotia Capital Inc. and National Bank Financial Inc. with respect to the proposed offering of unsecured debentures due in September 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 on May 18, 1967. The Issuer’s head office is located at 455 René Lévesque Blvd. West, Montreal, Québec HZ2 1Z3.
2. The Issuer is a reporting issuer in all provinces of Canada. The Issuer’s outstanding Common Shares are listed on The Toronto Stock Exchange.
3. The proposed Offering will consist in unsecured debentures due in September 2010. The credit rating given to the debentures by approved credit rating agencies is favourable (BBB (high) for CBRS Inc. and BBB for DBRS.
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 on August 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 the Underwriters 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 the Canadian chartered banks (the “Banks”) which are affiliates of RBCDS, BMO Nesbitt Burns Ltd., Scotia Capital Inc. 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 been already 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 Legislation with RBCDS, BMO Nesbitt Buns Ltd., Scotia Capital Inc. and National Bank Financial Inc. Furthermore, the Underwriters 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 the Prospectus.
10. The Prospectus will contain a certificate signed by each Underwriter in accordance with Item 20 of Appendix B 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 the Banks.
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 the portion of indebtedness owed thereunder to each of the Banks, the Issuer may, in connection with the Offering be 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 made through negotiation between the Issuer and the Underwriters without involvement of the Banks. The Applicants will 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 the Offering. 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 Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the 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 requirements of applicable regulations in relation with the requirements contained in the Legislation regarding acting as an underwriter in 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 of Multi-Jurisdictional Instrument 33-105.
2. The prospectus shall describe the relation between the Issuer and the Underwriters. The information shall appear in bold text on the face page and in the body of the prospectus.
DATED at Montréal, this 8th day of September, 2000
Jean Lorrain
Director, Compliance and Enforcement