BARRIE, Ontario, Oct. 3, 2012 (GLOBE NEWSWIRE) -- Student Transportation Inc. ("STI") (TSX:STB) (TSX:STB.DB.A) announced today that it has exercised its right to redeem its 7.5% Convertible Subordinated Unsecured Debentures maturing on October 31, 2014 (the "Debentures") in accordance with the terms of the trust indenture dated as of October 26, 2009 between STI and Computershare Trust Company of Canada governing the Debentures. The redemption of the Debentures will be effective on November 2, 2012 (the "Redemption Date"). Upon redemption, STI will pay to the holders of Debentures the redemption price (the "Redemption Price") equal to the outstanding principal amount of the Debentures to be redeemed, together with all accrued and unpaid interest thereon up to but excluding the Redemption Date.
The aggregate principal amount of Debentures currently outstanding is Cdn $20,632,000. STI will draw funds from its existing revolving line of credit to pay the Redemption Price of those redeemed Debentures not yet converted at that time. The Debentures are listed for trading on the Toronto Stock Exchange under the trading symbol "STB.DB.A" and may be converted in accordance with their terms into common shares of STI until November 1, 2012.
"Our holders of these debentures have done well in our opinion with their investment. The company has an outstanding credit profile and an attractive dividend that are just some of the hallmarks of our eight year success as a public company. We have used debt wisely for growth," said STI Chairman and CEO Denis J Gallagher. "We have seen a considerable amount of activity in the conversion of these notes to common shares as more holders of the debentures appreciate the value in the shares from a dividend income and tax perspective. The redemption call provision of the notes outstanding allows note holders to either convert to common shares prior to the redemption date or receive cash for their debentures upon redemption. The current debt market is significantly lower in rates today and we will reduce our interest expense by calling these now with the availability in our senior credit facility." Gallagher added, "With approximately 15 percent growth built in year over year already for fiscal 2013, our focus this year as we stated on our recent analyst call is to reduce costs, lower our capital expenditures and maintain our great service which are all very attainable."