Royal Utilities Income Fund completes C$172.5 million initial public offering

Torys acted as counsel to Royal Utilities Income Fund with a team that included Geoff Creighton, Matthew Cockburn, Michael Pickersgill, Conni Gibson, Karie Ann Benham, Rima Ramchandani, Joanna Jazairi, Sue-Anne Fox and Trish Finkelstein (corporate and securities), John Unger and Catrina Card (tax), Dennis Mahony and Michael Fortier (environmental), Alison Lacy, Tom Zverina, Nadine Rockman Katz and Theresa Gregoire (lending) and Mitch Frazer and Christina Medland (pension and employment). The team worked under the direction of Julie Lee Harris, Senior Vice President, General Counsel of Sherritt International, and Michael Padfield, Senior Legal Counsel, Investments of Ontario Teachers' Pension Plan Board.

On June 27, 2006, Royal Utilities Income Fund (TSX: RU.UN) completed its initial public offering of 15 million trust units at C$10 per unit for total gross proceeds of C$150 million. The fund (formerly Luscar Coal Income Fund) indirectly holds all of the common shares of Prairie Mines and Royalty Ltd. (formerly Luscar Ltd.), the largest thermal coal producer in Canada. The fund used the net proceeds of the offering to repay existing debt. Concurrent with the closing, the fund's subsidiaries entered into a new C$150 million senior credit facility with a syndicate of lenders led by National Bank of Canada and Royal Bank of Canada.

On July 19, 2006, pursuant to the exercise of the over-allotment option granted to the underwriters in connection with the initial public offering, the fund issued an additional 2.25 million trust units at C$10 per unit for total gross proceeds of C$22.5 million.

After giving effect to these transactions, wholly owned subsidiaries of Sherritt International Corporation and Ontario Teachers' Pension Plan Board, collectively, indirectly own approximately 82.4% of the issued and outstanding trust units of the fund.

The underwriting syndicate was led by RBC Capital Markets and National Bank Financial Inc., and included BMO Capital Markets, TD Securities Inc., GMP Securities L.P., Peters & Co. Limited and Salman Partners Inc.