CALGARY, Oct. 21 /CNW/ -- Canyon Services Group Inc. ("Canyon" or the "Company") (TSX: FRC) is pleased to announce that it has received the written consent of a majority of its shareholders (approximately 66% of the Common Shares to date) to approve certain aspects of its previously announced bought deal prospectus financing and concurrent private placement, which are scheduled to close on October 28, 2009 (the "Closing").

Further to its press releases dated October 6, 2009, Canyon confirms that it has received conditional listing approval from the Toronto Stock Exchange (the "TSX") for the listing of an additional 10,000,000 common shares ("Common Shares") to be issued on an underwritten "bought deal" basis (the "Offering"). Additionally, Canyon has received conditional listing approval from the TSX with respect to the issuance of 15,000,000 Common Shares to be issued concurrently with the Offering to the limited partnerships comprising ARC Energy Fund 6 ("ARC Fund") on an underwritten private placement basis (the "Concurrent Private Placement").

The Common Shares to be issued under each of the Offering and the Concurrent Private Placement are being offered at a price of $2.00 per Common Share, which represents a discount of approximately 9.3% to the weighted average trading price of the Common Shares on the TSX for the five trading days immediately preceding the announcement of the Offering and the Concurrent Private Placement and a 14.5% percent discount to the trading price of the Common Shares on the TSX on October 5, 2009, the last trading day prior to announcement of the Offering and the Concurrent Private Placement.

Pursuant to the Offering, the Common Shares have been offered in all provinces of Canada (except Quebec) by way of a short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration requirements pursuant to Rule 144A and/or Regulation D of the United States Securities Act of 1933, as amended. A receipt for the final short form prospectus in respect of the Offering was issued by the Alberta Securities Commission on October 20, 2009.

Proceeds of the Offering and Concurrent Private Placement will be used to fund the Company's capital program, to temporarily reduce bank indebtedness and for general corporate purposes. Canyon's continued expansion into deeper segments of the pressure pumping market with the successful completion of large, horizontal, multi-stage fracturing programs in the Montney area of the Western Canada Sedimentary Basin has resulted in increased demand for Canyon's services and the need to expand its pressure pumping fleet. Canyon's expanded capital program increases the Company's horsepower capabilities from 26,000 hhp to over 70,000 hhp, which management believes positions Canyon as one of the leaders in providing pressure pumping services to Canada's unconventional natural gas resource plays.

Closing of the Offering and the Concurrent Private Placement is expected to occur concurrently on or about October 28, 2009. At Closing, an aggregate of 25,000,000 common shares will be issued for gross proceeds to Canyon of $50.0 million. The syndicate of underwriters, led by Cormark Securities Inc. and including Peters & Co. Limited and Raymond James Ltd. (the "Underwriters"), shall be entitled to terminate the Offering if the Concurrent Private Placement shall not have closed prior to or concurrently with the Offering.

Following the Concurrent Private Placement, ARC Fund will exercise control or direction over 15,000,000 Common Shares representing approximately 32% of the issued and outstanding Common Shares (on a non-diluted basis), thus the Concurrent Private Placement will materially impact control of the Company.