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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Dominion Bridge Corporation
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[Dominion Bridge Letterhead]
FOR IMMEDIATE RELEASE NEWS RELEASE
FROM: LARRY STAUFFER COMPANY: FRANCOIS MORIN
PORTER, LEVAY & ROSE, INC. (514) 634-3550
(212) 564-4700
KUHNS COMMITTEE DETAILED PROPOSAL
MORE DETAIL
STILL
NO SUBSTANCE! NO SHAREHOLDER VALUE!
STILL
NO FUNDING INFORMATION FOR THE
US$106 MILLION OF PROMISES!
Montreal, Canada, July 14 - Dominion Bridge Corporation (NASDAQ: DBCO; VSE:
DMO.U) ("DBC"), in response to a press release issued July 11, 1997 by the
Kuhns committee, reiterated its rejection of the Kuhns business plan as STILL
HAVING NO MERIT AND NO SUBSTANCE. Specifically, the so-called financial
projections issued by the Kuhns committee, while voluminous, fail to identify
the source and nature of the required US$106 MILLION OF INVESTMENT which the
Kuhns committee documentation states their program will require.
FIRSTKEY AND ITS CUBAN CONNECTION
Instead of more, there is less and less information about the mystery
surrounding FirstKey Project Technologies Inc.'s ("FIRSTKEY") financial status
and about the US$600 million backlog which the Kuhns committee claims. DBC has
been advised by informed Government and industry sources that the so-called
FIRSTKEY backlog pertains to co-generation power projects which are in the
early stages of development, have no signed final Power Purchase Agreements,
have no financing in place and are located in CUBA. FIRSTKEY's negotiations
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relative to these CUBA projects have not progressed beyond initial
letters of intent with the Cuban government. This is NOT BACKLOG according to
US-GAAP or CANADIAN GAAP. DBC is a Delaware registered company and, like other
United States corporations, cannot trade, directly or indirectly, with CUBA.
There is a serious potential legal liability associated with the Kuhns
committee's proposal to have DBC acquire the shares or the assets of a company
doing business in CUBA. DBC has always respected both the spirit and the letter
of the "TRADING WITH THE ENEMIES ACT" and will not entertain the legal
acquisition as proposed by the Kuhns committee.
MISUSE OF INSIDER INFORMATION AND MISREPRESENTATIONS
Kuhns committee's projections are derived from a document that John Dutton
remitted to DBC's lawyers as a result of John Dutton's deposition. This
document confirms that the Kuhns committee has been using highly confidential
insider information not available in the public domain. These projections
include numerous items which are identical to DBC's internal projections which
were prepared by John Dutton for DBC while he was an officer of DBC's
subsidiary.
Kuhns committee's budget repeatedly uses the term "AS FILED WITH THE SEC" in an
attempt to make shareholders believe that the Kuhns committee's projections
have been approved by the SEC. Furthermore, DBC shareholders have reported that
members of the Kuhns committee represented to them that the SEC had, in fact,
approved their budget. These pronouncements are entirely false as the SEC
mandate and regulations do not provide for such approvals. Under U.S. Federal
law, it would be a criminal offence to make such representations.
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CONSIDERATION OF THE LEGAL IMPLICATIONS
DBC has obtained independent legal opinions confirming that the Kuhns
committee's proxy solicitation consent process is illegal and that the Kuhns
committee's proposed by-laws are illegal under Delaware law. Moreover, even if
the Kuhns committee is successful in achieving the required votes, the Delaware
court will still have to rule on the legality of the Kuhns committee proxy
solicitation. During the lengthy court process, the company would be in a
corporate gridlock and could not function in a normal operating manner.
Investment bankers, brokers and financial advisers should inform themselves of
any potential legal consequences before advising their clients to vote in
favour of the Kuhns committee.
WHO IS MANAGEMENT?
Kuhns committee's proposal confirms what DBC has been saying all along, that
the members of the Kuhns committee have NO EXPERIENCE and NO EXPERTISE IN OUR
INDUSTRY. Kuhns committee had to assemble in haste a last-minute management
team to provide a semblance of industry experience.
KUHNS COMMITTEE'S MISLEADING PROJECTIONS
Kuhns committee's hypotheses supporting their budget is a litany of gloom
and doom setting the stage for the Kuhns committee to "back up the truck"
and write-off items which have not been considered as write-offs by DBC's
auditors. The budget also calls for their own proxy solicitation cost to be
paid by DBC. The budget still does not identify the source of funds for the
required US$106 million and does not define the level of debt, equity and
dilution to the DBC shareholders. In Kuhns committee's budget, revenue and
profit increases are derived solely from the consolidation of FIRSTKEY's
project in CUBA and from the privatization of McConnell Dowell Corporation
("MDC"). However, Kuhns committee has still not demonstrated how it can
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grow the existing North American base without the acquisition of FIRSTKEY.
Kuhns committee's plan does not deal with the complex legal issues to privatize
MDC. At the MDC share price of today, the privatization cost, which would have
to be done at a premium, would cost in excess of US$45 million. Kuhns
committee's budget does not reflect the transaction and carrying cost of this
US$45 million privatization, as well as the balance of the US$106 million to
carry out their plan, therefore, inflating their profit projections. In
summary, Kuhns committee's budget does not deal with events of default relative
to the credit facility of DBC and of MDC, to the surety bonding facility of DBC
and MDC, does not reveal the source of financing, the level of dilution and the
debt load on the balance sheet of DBC and of MDC.
CONTINGENT VALUE RIGHTS ("CVR") OR VIRTUAL REALITY RIGHTS?
Kuhns committee's proposal to issue CVRs is intended to create the illusion
that DBC shareholders will receive US$2.50 minimum value for their shares. DBC
has had many corporate achievements in a very short period of time but it has
never been able to PRINT MONEY! WHAT is the present value of the CVRs? WHERE is
the back-up financial guarantee for the CVRs? The Kuhns committee wants to
reserve the rights to extend the CASH-IN period or issue additional treasury
shares in satisfaction of the CVR value, creating unlimited dilution. This is a
Virtual Reality Right! In fact, since 1996, the DBC shareholders are protected
by a Rights Plan which sets a higher minimum than the Virtual Reality Right.
Kuhns committee is capping off DBC's share price at US$2.50 for the next 18-24
months.
WHY vote for this unfunded and dilutive CVRs, WHEN the DBC shareholders can
obtain immediate real enhanced value through the Legg Mason accelerated plan
which is reviewing a number of serious industry and financial proposals for the
Company.
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COMMITTEE'S DAMAGE TO THE COMPANY
Kuhns committee filed its proxy solicitation on May 23, 1997, commissioned a
credit check on DBC while, at the same time, the members of the Kuhns committee
engaged in corporate terrorist acts aimed at destabilizing DBC by contacting
its clients, its employees, its suppliers and spreading lies, innuendoes and
allegations. These self-serving corporate terrorist acts, together with the
Kuhns committee "whisper campaign" were pre-meditated and well orchestrated and
aimed only at undermining the operations of the company without bringing any
value to those shareholders who have a real stake in DBC.
LET'S FOCUS ON THE REAL ISSUES
DBC shareholders should not be distracted or intimidated by the Kuhns
committee's attacks on DBC and should not be pressured by the artificial
deadline set by the Kuhns committee. The real issues are not to replace the
current management team with the Kuhns committee team. This argument is stale
and no longer valid. The real issue is the best choice for the Company among
the real alternatives being considered by Legg Mason. The fact of the matter is
that the Kuhns committee DOES NOT HAVE REAL ANSWERS and DOES NOT HAVE ANY MONEY
to finance their plan. This is not a TAKE-BACK, this is a TAKE-UNDER!
Instead, we ask the DBC shareholders to provide DBC and its Board of Directors
with their full support and cooperation in their current accelerated mandate
with Legg Mason to review strategic alternatives to enhance shareholder value.
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IF YOU HAVE ALREADY SIGNED A WHITE CONSENT CARD, PLEASE SIGN AND SEND THE GREEN
REVOCATION CARD NOW!
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT MORROW AND COMPANY
(212) 754-8000 OR 1-800-662-5200
Dominion Bridge was established in 1879. The company is active in the
international engineering and infrastructure markets. It manages projects and
operates facilities in North and South America, Europe and the Asia Pacific.
The company, together with its subsidiaries, employs more than 6,500 people,
with this year's anticipated revenues of over US $600 million. Consolidated
backlog is approximately US $500 million.
Dominion Bridge Corporation's subsidiaries are Dominion Bridge, Inc., Steen
Becker, Inc. and Davie Industries. Its Australian subsidiary, McConnell Dowell
Corporation is a major Asian Pacific engineering firm.
1997
This news release is neither approved nor disapproved by the Vancouver Stock
Exchange.
