CALGARY, Dec. 12, 2016 /PRNewswire/ - (TSX:
PMT) – Perpetual Energy Inc. ("Perpetual" or the
"Company") announces a proposal to exchange all of its 8.75%
senior notes due March 15, 2018 (the
"2018 Senior Notes") and its 8.75% senior notes due
July 23, 2019 (the "2019 Senior
Notes" and together with the 2018 Senior Notes, the
"Existing Senior Notes") for new 8.75% senior notes (the
"Exchange Senior Notes") having an extended maturity date of
December 23, 2021 (the "Note
Exchange Proposal"). The Note Exchange Proposal is
open for acceptance by holders of Existing Senior Notes until
5:00 p.m. (Toronto time) (the "Expiry Time") on
December 23, 2016, or such later time
and date on which the Note Exchange Proposal may be extended by
Perpetual (the "Expiry Date").
Holders of Existing Senior Notes who elect to participate in the
Note Exchange Proposal will receive $1,000 principal amount of Exchange Senior Notes
for each $1,000 principal amount of
Existing Senior Notes properly tendered to the Note Exchange
Proposal. The Exchange Senior Notes will contain the same terms as
the Existing Senior Notes other than having: (i) an extended
maturity date to December 23, 2021
(being five years from the Expiry Date of the Note Exchange
Proposal); (ii) an increased annual interest rate for the first
year, and only for the first year, that the Exchange Senior Notes
are outstanding of 9.75% instead of 8.75%, which is equal to the
equivalent of $10 per $1,000 principal amount of Existing Senior Notes
validly tendered under the Note Exchange Proposal; and (iii)
consequential changes to the interest payment dates and optional
redemption provisions to give effect to the extended maturity date
and increased annual interest rate for the first year that the
Exchange Senior Notes are outstanding.
Holders of Existing Senior Notes who accept and validly tender
their Existing Senior Notes to the Note Exchange Proposal will also
receive accrued and unpaid interest outstanding up to, but
excluding, the Expiry Date. In particular, holders of 2018
Senior Notes who tender their 2018 Senior Notes to the Note
Exchange Proposal will receive $23.73
per $1,000 principal amount of 2018
Senior Notes in cash and holders of 2019 Senior Notes who tender
their 2019 Senior Notes to the Note Exchange Proposal will receive
$36.68 per $1,000 principal amount of 2019 Senior Notes in
cash, in each case representing all accrued and unpaid interest
outstanding up to, but excluding, the Expiry Date of December 23, 2016.
The Board of Directors and management of Perpetual believe the
Note Exchange Proposal will enhance the Company's strategy of long
term value creation for securityholders as well as its assets and
operations. The Note Exchange Proposal will improve the Company's
liquidity beyond the current maturity dates of the Existing Senior
Notes, enabling Perpetual to pursue strategic growth and
value-enhancing opportunities important to its corporate strategy.
Directing capital to further develop the Company's asset base and
augment the profitability of its operations is expected to generate
greater short and long term value for securityholders than would
the retirement of its Existing Senior Notes.
Upon the successful completion of the Note Exchange Proposal,
Noteholders who participate in the Note Exchange Proposal will
continue to own a security on substantially the same terms
(including the 8.75% coupon rate) as the Existing Senior Notes with
the additional benefit of having a longer maturity date of five
years from the Expiry Date and an increased annual interest rate
for the first year the Exchange Senior Notes are outstanding
without incurring any additional transaction costs. In addition, in
the event that a significant amount of the outstanding aggregate
principal amount of the Existing Senior Notes are properly tendered
to the Note Exchange Proposal, holders of the Exchange Senior Notes
are anticipated to benefit from improved liquidity in the market
for Exchange Senior Notes, which is typically associated with a
larger overall issued and outstanding principal amount.
Perpetual currently intends to repay any 2018 Senior Notes and
2019 Senior Notes not tendered to the Note Exchange Proposal on or
prior to their respective maturity dates of March 15, 2018 and July
23, 2019 through proceeds from excess funds flow, asset
sales, refinancing or a combination thereof.
The completion of the Note Exchange Proposal is conditional upon
holders of Existing Senior Notes holding in the aggregate at least
$20 million aggregate principal
amount of the issued and outstanding Existing Senior Notes
accepting the Note Exchange Proposal and tendering their Existing
Senior Notes prior to the Expiry Time on the Expiry Date.
There is currently outstanding $36,013,000 aggregate principal amount of 2018
Senior Notes and $24,560,000
aggregate principal amount of 2019 Senior Notes. Assuming all
outstanding Existing Senior Notes are properly tendered to the Note
Exchange Proposal before the Expiry Time on the Expiry Date there
will be no Existing Senior Notes outstanding and $60,573,000 aggregate principal amount of
Exchange Senior Notes outstanding upon completion of the Note
Exchange Proposal. The directors and officers of Perpetual, as a
group, own approximately $854,000
principal amount of the Existing Senior Notes (approximately
$73,000 of 2018 Senior Notes and
approximately $781,000 of 2019 Senior
Notes) and intend to tender their Existing Senior Notes to the Note
Exchange Proposal.
Scotia Capital Inc. has been engaged to act as sole dealer
manager and solicitation agent, Kingsdale Shareholder Services has
been appointed the information agent and Computershare Investor
Services Inc. has been appointed as depositary for the Note
Exchange Proposal.
The Note Exchange Proposal is anticipated to be sent to holders
of Existing Senior Notes on or about December 12, 2016 and holders of Existing Senior
Notes are urged to evaluate carefully all information regarding the
Existing Senior Notes and the Exchange Senior Notes and to consult
their own investment, legal, tax and other professional advisors
and to make their own decision whether to accept the Note Exchange
Proposal.
Noteholders who have any questions or require further
information are encouraged to contact Scotia Capital Inc., the sole
dealer manager and solicitation manager, at 1-888-776-3666 or email
michael.lay@scotiabank.com, Kingsdale Shareholder Services, the
information agent, at 1-855-682-2031 or email
contactus@kingsdaleshareholder.com, or Computershare Investor
Services Inc., the depositary, at 1-800-564-6253 or email
corporateactions@computershare.com.
Notice to United States Noteholders
The solicitation described herein is made for the securities of
a Canadian entity and is subject to Canadian disclosure
requirements that are different from those of the United States. Financial statements
included or incorporated by reference in the Note Exchange Proposal
related to the solicitation have been prepared in accordance with
Canadian generally accepted accounting principles and are subject
to Canadian auditing and auditor independence standards, which
differ from United States
generally accepted accounting principles and United States auditing and auditor
independence standards. As a result, such financial
statements may not be comparable to the financial statements of
United States companies.
Perpetual Energy Inc. exists under the laws of the Province of
Alberta, Canada. It may be
difficult for U.S. Noteholders to enforce their rights and any
claim that they may have arising under United States federal or state securities
laws, as Perpetual is incorporated under the laws of Alberta, Canada, all or most of its assets are
located in Canada, and all or most
of its officers and directors are residents of Canada. You may not be able to sue a
foreign entity or its officers or directors in a foreign court for
violations of U.S. federal or state securities laws. It may
be difficult to compel a foreign entity and its affiliates to
subject themselves to a U.S. court's judgment.
You should be aware that Perpetual may purchase securities
otherwise than under the Note Exchange Proposal, such as in open
market or privately negotiated purchases.
Forward-Looking Information
Certain information regarding Perpetual in this news release
including management's assessment of future plans and operations
may constitute forward-looking statements under applicable
securities laws. The forward-looking information includes, without
limitation, statements regarding the Note Exchange Proposal and the
timing for its completion and the anticipated benefits to Perpetual
and its securityholders. Various assumptions were used in drawing
the conclusions or making the forecasts and projections contained
in the forward-looking information contained in this press release,
which assumptions are based on management analysis of historical
trends, experience, current conditions, and expected future
developments pertaining to Perpetual and the industry in which it
operates as well as certain assumptions regarding the matters
outlined above. Forward-looking information is based on current
expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and in some
instances to differ materially from those anticipated by Perpetual
and described in the forward looking information contained in this
press release. Undue reliance should not be placed on
forward-looking information, which is not a guarantee of
performance and is subject to a number of risks or uncertainties,
including without limitation those described under "Risk
Factors" in Perpetual's Annual Information Form and MD&A for
the year ended December 31, 2015 and
those included in other reports on file with Canadian securities
regulatory authorities which may be accessed through the SEDAR
website (www.sedar.com) and at Perpetual's website
(www.perpetualenergyinc.com). Readers are cautioned
that the foregoing list of risk factors is not exhaustive.
Forward-looking information is based on the estimates and opinions
of Perpetual's management at the time the information is released
and Perpetual disclaims any intent or obligation to update publicly
any such forward-looking information, whether as a result of new
information, future events or otherwise, other than as expressly
required by applicable securities laws.
About Perpetual
Perpetual Energy Inc. is a Canadian energy company with a
spectrum of resource-style opportunities spanning liquids-rich
natural gas in the Alberta deep
basin, shallow gas, heavy oil and bitumen. Perpetual's shares are
listed on the Toronto Stock Exchange under the symbol "PMT".
Further information with respect to Perpetual can be found at its
website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
SOURCE Perpetual Energy Inc.
