TORONTO, December 6, 2004 – Brascan Corporation (NYSE: BNN; TSX: BNN.LV.A) announced today that it intends to amalgamate with its wholly-owned subsidiary Brascan Financial Corporation. As a result, Brascan Corporation will assume all of the assets and liabilities of Brascan Financial and the existing Class I and II preferred shares issued by Brascan Financial will be exchanged for new Class A preferred shares of Brascan Corporation with substantially identical terms and conditions. The existing public debt of Brascan Financial notes will become obligations of Brascan Corporation.
Brascan Financial was privatized in 2002 when Brascan Corporation increased its common share ownership from 70% to 100%. However, the company has existed since that time as a reporting issuer with publicly listed traded preferred shares and publicly offered notes outstanding public debt. The amalgamation of the two companies is part of Brascan's ongoing strategy to simplify operations for the Brascan group and will eliminate administrative costs. Furthermore, the holders of Brascan Financial preferred shares will benefit from Brascan's higher preferred share credit ratings.
The transaction will require the approval of a two-third majority of Brascan Financial's preferred shareholders, voting as separate classes, at a meeting called for December 30, 2004. Information regarding the meeting and the transaction will be mailed to shareholders shortly.
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Brascan Financial Corporation is an asset management company. Brascan Financial's clients include governments, institutions, corporations and high net worth individuals. Brascan Financial also provides select business services and is active in the capital markets.
Brascan Corporation is an asset management company. With a focus on real estate and power generation, the company has direct investments of $19 billion and a further $7 billion of assets under management. This includes 70 premier office properties and 120 power generating plants. The company is listed on the New York and Toronto stock exchanges under the symbols BNN and BNN.LV.A respectively. For more information, please visit our web site at www.brascancorp.com.
This press release does not constitute an offer of securities in the United States, and the securities may not be offered in the United States absent registration or an exemption from registration. Any offer or issuance to be made in the United States will be made by means of a prospectus or other document that will contain detailed information about Brascan Corporation and its management, as well as financial statements, and can be obtained from Brascan Corporation or Brascan Financial Corporation.
| For more information, please visit our web site at www.brascancorp.com or contact: |
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Katherine C. Vyse
Senior Vice-President
Investor Relations and Communications
Tel: 416-369-8246
e-mail: kvyse@brascancorp.com
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Note: This press release and attachments contain “forward-looking statements” concerning the combination of Brascan Corporation and Brascan Financial within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe”, “expect”, “anticipate”, “intend”, “estimate” and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forward in the forward looking statements include general economic conditions, interest rates, availability of equity and debt financing and other risks detailed from time to time in the company's 40-F filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
ADDITIONAL INFORMATION
Brascan Financial preferred shares will be exchanged for Brascan Corporation preferred shares on a share-for-share basis as follows:
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Brascan Financial Preferred Shares
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Brascan Corporation Preferred
Shares
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Class I, Series A
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Class A, Series 13
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Class II, Series Two
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Class A, Series 14
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Class II, Series Three
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Class A, Series 13
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Class II, Series Four
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Class A, Series 15
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Class III, Series One & Two
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Cancelled (currently owned by
Brascan Corporation) |
The Toronto Stock Exchange has conditionally approved the listing of the Brascan Corporation Class A Shares, Series 13 and 14, subject to Brascan Corporation fulfilling all of the requirements of the exchange. As a result of the amalgamation, all of the outstanding preferred shares of Brascan Financial will be exchanged for the respective series of Brascan Class A preferred shares noted above with substantially the same terms and conditions as the preferred shares for which they have been exchanged.
The preferred shares of Brascan Corporation to be issued on the amalgamation will have full paid up capital and have been provisionally rated Pfd-2(low) by Dominion Bond Rating Service (DBRS) and P-2 by Standard and Poor's (S&P). The preferred shares of Brascan Financial are currently rated Pfd-2(low) and Pfd-3(high) by DBRS and P-2(low) by S&P.
Brascan Financial public debt obligations will become senior unsecured debt of Brascan Corporation on under the same terms and conditions as the existing Brascan Financial indentures:
C$125 million 7.35% medium term notes due October 2005;
C$125 million 8.35% debentures due December 2006; and
C$125 million 7.25% debentures due June 2007.
Brascan Financial's senior unsecured debt is rated A(low) by DBRS and BBB+ by S&P. Brascan Corporation's senior unsecured debt is rated A(low) by DBRS, Baa3 by Moody's Investors Service and A- by S&P.
Transaction Approvals: The proposed transaction will require the approval of two-thirds of preferred shares of each Class of Brascan Financial Corporation preferred shares voting at a meeting to be held on December 30, 2004. All holders of preferred shares, including Brascan Corporation, are eligible to vote their shares at the meeting. The transaction does not require any approval by Brascan Corporation shareholders.
Transaction Structure: Under the proposed transaction, Brascan Financial will amalgamate with a wholly-owned subsidiary of Brascan Corporation, and the resulting company will subsequently be amalgamate with Brascan Corporation. Holders of preferred shares will receive newly issued Brascan Corporation preferred shares as described above.
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