RECAPITALIZATION TRANSACTIONS NOVEMBER 2015 BOLD IDEAS FOR ENERGY
Introduction Announced Recapitalization Transactions to: Address immediate maturities Reduce debt Improve liquidity Recapitalization Transactions involve: 25 million of new equity (backstopped Rights Offering) New Financing…
Recapitalization Designed to Address Imminent Challenges 58.4 million bank margin loan due November 30, 2015 Near Term Debt 25.0 million bank credit facility due November 30, 2015 Maturities 34.9 million Convertible Debentures due…
Criteria and Constraints Criteria Constraints Extend maturities Substantially all assets pledged to secure debt Improve liquidity Debt comes with restrictive covenants Debt reduction Asset values are at depressed levels in…
Finding a Solution Recapitalization Transactions Bank debt maturities extended to October 31, 2016 Extend Maturities Revised financial covenants provide increased flexibility and stability New equity capital through Rights…
Pro Forma Capitalization September 30, (millions) Pro Forma (2) Change 2015 (1) Cash - 34.7 34.7 Bank Indebtedness (Credit Facility and 68.6 62.0 (6.6) Margin Loan ) New Financing - 21.3 21.3 Arrangement Convertible…
Pro Forma Liquidity Availability Pro Forma (millions) Liquidity Utilization (2) Cash 34.7 - 34.7 (1) Credit Facility 20.0 20.0 - (1)(3) Margin Loan 42.0 42.0 - New Financing Arrangement 21.3 21.3 Total Liquidity…
2016 Capital Plan 2016 Exploration and Development Capital Expenditures H1 2016 H2 2016 ( millions) West Central Liquids-Rich Gas 12.5 7.0 Mannville Heavy Oil 0.5 0.5 Eastern Alberta Shallow Gas 3.5 4.0 Total (1) 16.5…
Recapitalization Components Bank Debt Lender has extended bank debt to mature on October 31, 2016 Was previously due on November 30, 2015 No semi-annual review on April 30, 2016 More flexibility provided in covenant structure New…
Recapitalization Components Convertible Debentures Under the indenture that governs the Convertible Debentures, the Company has the right to elect to settle the Convertible Debentures with Common Shares The number of Common Shares…
Rights Offering and Convertible Debenture Process Today December January Convertible VWAP Common Share Common Share Debenture Calculation x shares x shares 1,000 Common Share Common Share 1 share 1 share Common Share 1…
Choices Available to Shareholders 100 Common Pre-Rights Offering Shares 100 Common 100 Rights to Rights are Issued + Shares Buy Shares Exercise Choices Sell Rights Do Nothing Rights Receive more Receive cash Lose…
Backstop Commitment A corporation controlled by the Companys Chairman has committed to exercise its Basic Subscription Rights and Additional Subscription Privilege and any Rights not exercised by other shareholders for up to 25…
Rights Offering Mechanics Each shareholder receives one Right per share held Each Right will cost approximately 0.1630 to exercise into Common Shares (Subscription Amount) Rights must be exercised prior to the expiry date…
Rights Offering Mechanics Illustrative example of the Rights Offering at different prices Cost to Exercise One Shares Issued per Right Effective Cost If 20-Day VWAP Equal to Right Exercised Paid per Share 0.20 0.1630 3.2228…
Rights Offering Mechanics To permit the Company to raise equity capital (with certainty) by way of a Rights Offering: Shareholders exercising Rights need to know what proportion of the Companys equity they will obtain if they…
Independent Committee Process To achieve the benefits of the Recapitalization, a number of steps needed to occur concurrently This necessitated arriving at an appropriate allocation of the pro forma equity to both: Existing…
Rights Offering - Key Questions The Rights will only be available to holders of Common Shares of Who receives Rights record on the Record Date (mid-December) The Rights will trade together with the common shares from the When…
Anticipated Process Timeline File Final Prospectus Early December Exact timeline will be fixed upon filing of the Final Prospectus Record Date for issuing Rights Mid-December Shares trade with Rights attached Mail Final…
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