CALGARY, Jan. 23, 2017 /CNW/ - (TSX: PMT) –
Perpetual Energy Inc. ("Perpetual" or the "Company")
announces that it has exchanged approximately $8.4 million aggregate principal amount of its
8.75% senior notes due March 15, 2018
(the "2018 Senior Notes") and approximately $9.0 million aggregate principal amount of 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 January 23, 2022
pursuant to the Company's previously announced note exchange
proposal (the "Note Exchange Proposal").
After giving effect to the Note Exchange Proposal, there is now
currently outstanding approximately $27.6
million aggregate principal amount of 2018 Senior Notes,
approximately $15.6 aggregate
principal amount of 2019 Senior Notes and approximately
$17.4 million aggregate principal
amount of Exchange Senior Notes (collectively, the "Senior
Notes").
Holders of Existing Senior Notes who accepted and validly
tendered their Existing Senior Notes to the Note Exchange Proposal
will receive $1,000 principal amount
of Exchange Senior Notes for each $1,000 principal amount of Existing Senior Notes
tendered to the Note Exchange Proposal. The Exchange Senior Notes
contain the same terms as the Existing Senior Notes other than now
having: (i) an extended maturity date to January 23, 2022 (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.
In addition, holders of Existing Senior Notes who accepted and
validly tendered their Existing Senior Notes to the Note Exchange
Proposal will receive accrued and unpaid interest outstanding up
to, but excluding, January 23,
2017. In particular, holders of 2018 Senior Notes who
tendered their 2018 Senior Notes to the Note Exchange Proposal will
receive an interest payment of $31.16
per $1,000 principal amount of 2018
Senior Notes in cash. All holders of 2019 Senior Notes will receive
their semi-annual interest payment of $43.75 per $1,000 principal amount of 2019 Senior Notes in
cash regardless of whether or not they tendered their 2019 Senior
Notes to the Note Exchange Proposal. In each case the payments
represent all accrued and unpaid interest outstanding up to, but
excluding, the expiry date of January
23, 2017.
The Board of Directors and management of Perpetual believe the
extension of the maturity profile of its Senior Notes enhances the
Company's value creation strategy by improving the Company's
liquidity beyond the current maturity dates of the Existing Senior
Notes, and enabling Perpetual to pursue capital investment for
strategic growth and value-enhancing opportunities important to its
corporate strategy.
Perpetual currently intends to repay any 2018 Senior Notes and
2019 Senior Notes not exchanged pursuant 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.
Scotia Capital Inc. acted as sole dealer manager and
solicitation agent, Kingsdale Advisors acted as the information
agent and Computershare Investor Services Inc. acted as depositary
for the Note Exchange Proposal.
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 anticipated benefits to
Perpetual and its securityholders from the Note Exchange Proposal.
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.