Onex redeems C$728.9 million debentures exchangeable for Celestica

By Sheri Kasprzak

Atlanta, Feb. 1 - Onex Corp. said it is redeeming C$728.9 million principal amount of debentures that are exchangeable for subordinated voting shares of Celestica Inc.

The principal amount of the debentures will be paid with 9,214,320 subordinated voting shares of Celestica.

Onex said the debentures were a financial hedge for its underlying Celestica shares so the action will not affect the value of its interest in Celestica.

Onex, according to a company statement, is redeeming the debentures to eliminate their annual interest expense of about C$11.3 million. The redemption is expected to be completed by Feb. 16.

The company will report a gain of about C$560 million as a result of the redemption, based on Dec. 31 carrying values.

To facilitate the redemption, Onex converted 9,214,320 multiple voting shares into the subordinated voting shares.

An early termination premium of C$12.2 million plus interest will also be paid in cash, the company said in a statement.

Following the redemption, Onex will still hold 27.3 million multiple voting shares of Celestica.

Onex is a Toronto-based holding company for the service, manufacturing and technology industries. The company's stock closed up C$0.17 at C$19.52 on Tuesday.

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