/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
CALGARY, Jan. 24, 2017 /CNW/ - Hyduke Energy Services
Inc. ("Hyduke" or the "Company") (TSX: HYD) announces an up to
$10,000,000 marketed private
placement (the "Private Placement").
Hyduke has entered into an agreement with Lightyear Capital Inc.
and PI Financial Corp. (collectively the "Co-Lead Agents"),
pursuant to which the Co-Lead Agents have agreed to market, on a
commercially reasonable best efforts private placement basis, up to
29,411,764 common shares of Hyduke at a price of $0.34 per common share (the "Offering Price"),
for aggregate gross proceeds of $10,000,000. The Company has also granted
the Co-Lead Agents an option, exercisable in whole or in part,
prior to closing of the Private Placement, to purchase up to an
additional 4,411,764 common shares at the Offering Price, which if
exercised in full, would increase the gross proceeds by
$1,500,000. The Private Placement is
expected to close in early February. The Offering Price was set
with reference to the five-day volume weighted average trading
price of the common shares on the Toronto Stock Exchange (the
"TSX") for the trading period ending January
23, 2017.
The new management and board of directors of the Company
initiated a major corporate turnaround and restructuring which
commenced in early 2014. The objective was for Hyduke to become a
key supplier of manufacturing and fabrication services of a variety
of products and equipment to the full spectrum of upstream oil and
gas clients including exploration and production companies,
midstream companies, EPC (engineering, procurement and
construction) contractors, and traditional clients in the drilling
and well servicing sector. The Company has been waiting for the
right market conditions to expand its historically profitable rig
supply (BW RIG) business which has returned to profitability in
recent months. In the past year, Hyduke has been vendor-approved by
about 100 new customers which the Company anticipates doing
business with in 2017 and beyond. As well, as part of this
restructuring Hyduke may, from time to time, consider possible
acquisitions of compatible assets or companies. With a meaningful
recovery underway, Hyduke believes now is the time to execute this
plan. The proceeds from the Private Placement will be used for both
general corporate purposes and to further the foregoing plan.
This Private Placement is subject to certain conditions
including regulatory approvals and specifically, the approval of
the TSX. The common shares issued in connection with the Private
Placement will be subject to a statutory hold period of four months
plus one day from the date of completion of the Private Placement,
in accordance with applicable securities legislation.
This press release does not constitute an offer to sell or a
solicitation of any offer to buy the common shares in the United States. The common shares have not
been and will not be registered under the U.S. Securities Act of
1933 and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of such
Act.
Forward looking information
This news release contains forward-looking information
relating to the timing of completion of the Private Placement; the
receipt of all regulatory approvals including that of the TSX; the
use of proceeds of the Private Placement; the exercise of the
option granted to the Co-Lead Agents; plans to restructure the
Company's business; the potential to undertake acquisitions; and
other statements that are not historical facts. Such
forward-looking information is subject to important risks,
uncertainties and assumptions. The results or events predicated in
this forward-looking information may differ materially from actual
results or events. As a result, you are cautioned not to place
undue reliance on this forward-looking information.
Forward-looking information is based on certain factors and
assumptions regarding, among other things, the use of the net
proceeds of the Private Placement will not be subject to change;
the timing of closing of the Private Placement; and the timely
receipt of all regulatory and third party approvals for the Private
Placement, including those required by the TSX and any consents
required from the Company's lenders to utilize the net proceeds of
the Private Placement as desired. While the Company considers these
assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect.
Forward looking-information is subject to certain factors,
including risks and uncertainties that could cause actual results
to differ materially from what is currently expected. These factors
include risks associated with that the Private Placement may not
close when planned (or at all) or on the terms and conditions set
forth herein; the failure of the Company to obtain all necessary
regulatory and third party approvals (including the TSX) for the
Private Placement; the failure to obtain the necessary consents and
approvals of the Company's lenders; that the Company's budget and
plans for the net proceeds from the Private Placement will be
amended in a manner that is different from those set forth herein;
that the Company may have trouble attracting new customers and/or
existing customers may have cash constraints; volatility in market
prices for oil and natural gas; and the general economic conditions
in Canada.
You should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. While the Company may elect to, the Company is under no
obligation and does not undertake to update this information at any
particular time, except as required by law.
The TSX has neither reviewed nor approved this
release.
SOURCE Hyduke Energy Services Inc.