Just Energy Announces the Closing of its Recapitalization Plan and Reconstitution of the Board of Directors
September 28 2020 - 10:56AM
Just Energy Group Inc. (“Just Energy” or the “Company”) (TSX:JE;
NYSE:JE), a retail energy provider specializing in electricity and
natural gas commodities and bringing energy efficient solutions and
renewable energy options to customers, today announced the closing
of its previously announced recapitalization plan (the
“Recapitalization”) and the reconstitution of its board of
directors (the “Board”).
Together, these actions reduce debt, increase
liquidity and refresh Just Energy’s governance. The
Recapitalization strengthens and de-risks the business and
positions Just Energy for sustainable growth as an independent
industry leader.
“With the closing of our Recapitalization, Just
Energy can confidently move forward with a solid financial
position, focused on executing our strategy and serving our
clients,” said R. Scott Gahn, Just Energy’s President and Chief
Executive Officer.
“I would like to thank all our employees for
their continued dedication and hard work during the past several
months. Our reconstituted board, improved financial flexibility and
increased liquidity position us well for future success and I look
forward to the next chapter for Just Energy.”
The slate of seven previously announced director
candidates were appointed to the Board upon closing of the
Recapitalization. They possess a wide spectrum of skills and
expertise, including deep knowledge of the energy industry, and
will help maintain the Company’s commitment to strong and
transparent governance. The reconstituted Board is as follows:
- James Bell (new)
- Anthony Horton (new)
- Steven Murray (new)
- Stephen Schaefer (new)
- Marcie Zlotnik (new)
- R. Scott Gahn (incumbent)
- Dallas Ross (incumbent)
The Recapitalization provided for, among other
things:
- The consolidation of the Company’s
common shares (TSX:JE; NYSE:JE ) on a 1-for-33 basis. The Company’s
common shares will begin trading on the TSX and the NYSE on a
post-consolidation basis at the market open on September 29,
2020;
- The exchange of C$160 million 6.75%
convertible unsecured senior subordinated debentures due December
31, 2021 (TSX: JE.DB.C) and C$100 million 6.75% convertible
unsecured senior subordinated debentures due March 31, 2023 (TSX:
JE.DB.D) (collectively, the “Convertible Debentures”) for new
common shares and new subordinated notes. The Convertible
Debentures will be delisted from the TSX at the market close on
September 28, 2020;
- The exchange of the Company’s
existing senior unsecured term loan due September 12, 2023 (the
“Term Loan”) and the Company’s remaining convertible bonds due
December 31, 2020 (the “Eurobonds”) for a new term loan due March
2024 with initial interest to be paid-in-kind and new common
equity;
- The exchange of all 8.50%,
fixed-to-floating rate, cumulative, redeemable, perpetual preferred
shares (TSX: JE.PR.U) (NYSE: JE.PRA) (the “Preferred Shares”) for
new common shares. The Preferred Shares will be delisted from the
TSX and the NYSE at the market close on September 28, 2020;
- The Company’s existing senior
secured credit facility was amended to provide for an extension of
C$335 million credit facilities by three years to December 2023,
with revised covenants and a schedule of commitment reductions
throughout the term;
- Holders of Just Energy’s existing
Term Loan, Eurobonds Convertible Debentures, Preferred Shares and
common shares as of July 23, 2020 were entitled to subscribe for
post-consolidation common shares at a price per share of C$3.412.
The equity subscription option received interest from all security
classes, with subscriptions totaling 15,174,950 common shares which
resulted in cash proceeds for Just Energy of approximately C$52
million. Pursuant to the previously announced backstop commitments,
the backstop parties have acquired the remaining common shares not
subscribed for by eligible holders under the equity subscription
option, totaling 14,137,580 common shares, on a post-consolidation
basis. The aggregate proceeds from the equity subscription option
are approximately C$100 million and will be used to reduce debt and
for general corporate purposes;
- The issuance of C$3.67 million of
common shares by way of an additional private placement to the
Company’s term loan lenders at the same subscription price
available to all securityholders pursuant to the new equity
subscription offering;
- The settlement of litigation
related to the 2018 acquisition of Filter Group Inc. pursuant to
which shareholders of the Filter Group received an aggregate of
$1.8 million in cash and 429,958 common shares; and
- Implementation of a new management
equity incentive plan that will permit the granting of various
types of equity awards, including stock options, share appreciation
rights, restricted shares, and deferred shares.
The aforementioned new subordinated notes were
issued to the holders of Just Energy’s Convertible Debentures in
the United States pursuant to an exemption from the registration
requirements of the U.S. Securities Act of 1933, as amended, and
will be “restricted securities” subject to applicable resale
restrictions thereunder.
About Just Energy Group
Inc.
Just Energy is a consumer company focused on
essential needs, including electricity and natural gas health and
well-being, such as water quality and filtration devices; and
utility conservation, bringing energy efficient solutions and
renewable energy options to consumers. Currently operating in the
United States and Canada, Just Energy serves residential and
commercial customers. Just Energy is the parent company of Amigo
Energy, EdgePower Inc., Filter Group Inc., Hudson Energy,
Interactive Energy Group, Tara Energy, and TerraPass.
Visit https://investors.justenergy.com/ to learn more.
Also, find us on Facebook and follow us
on Twitter.
FORWARD-LOOKING STATEMENTS This
press release may contain forward-looking statements. These
statements are based on current expectations that involve a number
of risks and uncertainties which could cause actual results to
differ from those anticipated. These statements are based on
current expectations that involve several risks and uncertainties
which could cause actual results to differ from those anticipated.
These risks include, but are not limited to, risks with respect to
the proposed recapitalization transaction resulting in a
financially stronger Company; the value of existing equity
following the completion of a recapitalization; the impact of the
evolving COVID-19 pandemic on the Company’s business, operations
and sales; reliance on suppliers; uncertainties relating to the
ultimate spread, severity and duration of COVID-19 and related
adverse effects on the economies and financial markets of countries
in which the Company operates; the ability of the Company to
successfully implement its business continuity plans with respect
to the COVID-19 pandemic; the Company’s ability to access
sufficient capital to provide liquidity to manage its cash flow
requirements; general economic, business and market conditions; the
ability of management to execute its business plan; levels of
customer natural gas and electricity consumption; extreme weather
conditions; rates of customer additions and renewals; customer
credit risk; rates of customer attrition; fluctuations in natural
gas and electricity prices; interest and exchange rates; actions
taken by governmental authorities including energy marketing
regulation; increases in taxes and changes in government
regulations and incentive programs; changes in regulatory regimes;
results of litigation and decisions by regulatory authorities;
competition; the performance of acquired companies and dependence
on certain suppliers. Additional information on these and other
factors that could affect Just Energy’s operations, financial
results or dividend levels are included in Just Energy’s annual
information form and other reports on file with Canadian securities
regulatory authorities which can be accessed through the SEDAR
website at www.sedar.com on the U.S. Securities and Exchange
Commission’s website at www.sec.gov or through Just Energy’s
website at www.justenergygroup.com.
Neither the Toronto Stock Exchange nor the New
York Stock Exchange has approved nor disapproved of the information
contained herein.
FOR FURTHER INFORMATION PLEASE
CONTACT: Jim
BrownChief Financial OfficerJust
Energy713-544-8191jbrown@justenergy.com
or
InvestorsMichael CummingsAlpha
IRPhone: (617) 982-0475 JE@alpha-ir.com
MediaBoyd ErmanLongview
CommunicationsPhone: 416-523-5885berman@longviewcomms.ca
Source: Just Energy Group Inc.
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