Bellatrix Exploration Ltd. (“
Bellatrix” or the
“
Company”) (TSX: BXE) today announced that at the
meetings (the “
Meetings”) of holders of the
Company’s outstanding 8.5% senior unsecured notes due 2020 (the
“
Senior Unsecured Noteholders”), holders of the
Company’s outstanding 6.75% convertible debentures due 2021 (the
“
Convertible Debentureholders”) and holders of the
Company’s common shares (the “
Existing
Shareholders”) held today, the Senior Unsecured
Noteholders, Convertible Debentureholders and Existing Shareholders
approved the Company’s previously announced recapitalization
transaction (the “
Recapitalization Transaction”)
to be implemented pursuant to a plan of arrangement (the
“
Plan of Arrangement”) under the Canada
Business Corporations Act (the “
CBCA”).
Approval of the Plan of
Arrangement
At the Meetings, 100% of the votes cast by
Senior Unsecured Noteholders, 99.51% of the votes cast by
Convertible Debentureholders and 87.18% of the votes cast by
Existing Shareholders were voted in favour of the Plan of
Arrangement.
Election of Directors
The eight candidates nominated for election to
Bellatrix’s board of directors (the “Board of
Directors”) as listed in the Company’s management
information circular dated April 18, 2019 (the
“Information Circular”) and voted
upon at the annual and special meeting of Existing Shareholders
(the “Shareholders’ Meeting”) were elected by
Existing Shareholders present or represented by proxy at the
Shareholders’ Meeting. The voting results are as follows:
|
Votes For |
Votes Withheld |
Nominees |
Number |
% |
Number |
% |
Brent A. Eshleman |
13,773,939 |
70.74 |
5,698,411 |
29.26 |
John H. Cuthbertson |
13,732,743 |
70.52 |
5,739,607 |
29.48 |
W.C. (Mickey) Dunn |
13,687,313 |
70.29 |
5,785,037 |
29.71 |
Lynn Kis |
13,690,043 |
70.31 |
5,782,307 |
29.69 |
Keith E. Macdonald |
13,744,499 |
70.58 |
5,727,851 |
29.42 |
Thomas E. MacInnis |
13,739,976 |
70.56 |
5,732,374 |
29.44 |
Murray B. Todd |
13,704,217 |
70.38 |
5,768,133 |
29.62 |
Keith S. Turnbull |
13,691,566 |
70.31 |
5,780,784 |
29.69 |
|
|
|
|
|
As described in the Information Circular,
pursuant to the Recapitalization Transaction, the Senior Unsecured
Noteholders that entered into the support agreement with the
Company on March 28, 2019 (the “Initial Consenting
Noteholders”) will have a one-time right as part of the
implementation of the Recapitalization Transaction to designate
nominees for the Board of Directors that will comprise such
proportion of the Board of Directors upon implementation of the
Recapitalization Transaction as agreed to by the Company and the
Initial Consenting Noteholders, and the composition and size of the
Board of Directors upon implementation of the Recapitalization
Transaction shall be acceptable to the Initial Consenting
Noteholders and the Company. Accordingly, pursuant to the
Plan of Arrangement, certain of the directors of Bellatrix at the
time of the implementation of the Plan of Arrangement will resign,
and the new directors determined by the Initial Consenting
Noteholders pursuant to the Plan of Arrangement will be deemed to
be appointed. The Company will provide a further update on
these matters at the appropriate time in connection with
implementation of the Recapitalization Transaction.
Shareholder Approval of Other
Matters
In addition to the above, at the Shareholders’
Meeting all other resolutions described in the Information Circular
were approved by the Existing Shareholders as follows: (i) the
special resolution approving the continuance of Bellatrix into the
federal jurisdiction of Canada under the CBCA (the
“Continuance”) and repealing and replacing the
existing by-laws of Bellatrix with new by-laws upon completion of
the Continuance was approved by 88.47% of the votes cast by
Existing Shareholders; (ii) the special resolution to reduce the
stated capital of Bellatrix’s common shares by $800 million (the
“Stated Capital Reduction”) was approved by 85.70%
of the votes cast by Existing Shareholders; (iii) the ordinary
resolution approving the amendment to the exercise price of the
warrants (the “Second Lien Exchange Warrants”)
issued to the holders of the Company’s existing 8.5% second lien
notes due 2023 (the “Existing Second Lien
Noteholders”) and the issuance of certain additional
warrants on the same terms as the amended Second Lien Exchange
Warrants to the Existing Second Lien Noteholders as further
described in the Information Circular was approved by 85.65% of the
votes cast by Existing Shareholders; (iv) the ordinary resolution
approving the appointment of KPMG LLP as the auditor of the Company
was approved by 80.40% of the votes cast by Existing Shareholders;
(v) the ordinary resolution approving all unallocated awards under
the Company’s award plan was approved by 69.43% of the votes cast
by Existing Shareholders; and (vi) the non-binding advisory
resolution in respect of the Company’s approach to executive
compensation was approved by 70.98% of the votes cast by Existing
Shareholders.
The Company expects to complete the Continuance
prior to seeking approval of the Plan of Arrangement by the Ontario
Superior Court of Justice (Commercial List) (the
“Court”).
Court Approval and
Implementation
The hearing to seek Court approval of the Plan
of Arrangement is currently scheduled for 10:00 a.m. (EDT) on May
28, 2019, or such other date as may be set by the Court. Subject to
obtaining Court approval of the Plan of Arrangement and the
satisfaction or waiver of the other conditions to the
implementation of the Plan of Arrangement, the Company is working
to complete the Recapitalization Transaction on or about May 30,
2019.
As part of seeking Court approval of the
Recapitalization Transaction, the Company and its subsidiary,
11260049 Canada Limited (the “Bellatrix
Subsidiary”), will seek a permanent waiver of: (a)
defaults resulting from the commencement of its CBCA proceedings
(the “CBCA Proceedings”) or the steps or
transactions related to the CBCA Proceedings or the
Recapitalization Transaction, and (b) third party change of
control provisions that may be triggered by the implementation of
the Recapitalization Transaction.
About Bellatrix
Bellatrix Exploration Ltd. is a publicly traded
Western Canadian based growth oriented oil and gas company engaged
in the exploration for, and the acquisition, development and
production of oil and natural gas reserves, with highly
concentrated operations in west central Alberta, principally
focused on profitable development of the Spirit River liquids rich
natural gas play.
For further information, please
contact:
Steve Toth, CFA, Vice President, Investor Relations &
Corporate Development (403) 750-1270
Bellatrix Exploration Ltd. 1920,
800 – 5th Avenue SW Calgary, Alberta, Canada T2P 3T6 Phone: (403)
266-8670 Fax: (403) 264-8163 www.bxe.com
FORWARD LOOKING STATEMENTS: Certain information
contained in this press release may contain forward looking
statements within the meaning of applicable securities laws. The
use of any of the words “continue”, “plan”, “propose”, “would”,
“will”, “believe”, “expect”, “position”, “anticipate”, “improve”,
“enhance” and similar expressions are intended to identify
forward-looking statements. More particularly and without
limitation, this document contains forward-looking statements
concerning: the expected process for and timing of implementing the
Recapitalization Transaction; the expectation and timing for the
completion of the Continuance; the expectation around changes to
the Company’s Board of Directors in connection with the
implementation of the Plan of Arrangement and the provision of
additional information in respect thereof; the expectation that the
Company and the Bellatrix Subsidiary will attend a hearing before,
and seek certain relief from, the Court and the expected timing for
such hearing.
Forward-looking statements necessarily involve
risks, including, without limitation, the ability of the Company to
implement the Recapitalization Transaction on the terms described
in this press release, the other press releases issued in respect
of the Recapitalization Transaction and the Information Circular;
the ability of the Company to receive all necessary regulatory,
court, third party and stakeholder approvals in order to complete
the Recapitalization Transaction; the ability of the Company to
achieve its financial goals including with respect to the nature of
any agreement with its debtholders; the ability of the Company to
operate in the ordinary course during the CBCA Proceedings,
including with respect to satisfying obligations to service
providers, suppliers, contractors and employees; the ability of the
Company to continue as a going concern; the ability of the Company
to continue to realize its assets and discharge its liabilities and
commitments; the ability of the Company to comply with its
contractual obligations, including, without limitation, its
obligations under debt arrangements; the general regulatory
environment in which the Company operates; the tax treatment of the
Company and the materiality of any legal and regulatory
proceedings; the general economic, financial, market and political
conditions impacting the industry and markets in which the Company
operates; the ability of the Company to generate sufficient cash
flow from operations; the impact of competition; the ability of the
Company to obtain and retain qualified staff, equipment and
services in a timely and efficient manner (particularly in light of
the Company’s efforts to restructure its debt obligations); and the
ability of the Company to retain members of the senior management
team, including but not limited to, the officers of the
Company.
Events or circumstances may cause actual results
to differ materially from those predicted, as a result of the risk
factors set out and other known and unknown risks, uncertainties,
and other factors, many of which are beyond the control of
Bellatrix. In addition, forward looking statements or information
are based on a number of factors and assumptions which have been
used to develop such statements and information but which may prove
to be incorrect and which have been used to develop such statements
and information in order to provide stakeholders with a more
complete perspective on Bellatrix’s future operations. Such
information may prove to be incorrect and readers are cautioned
that the information may not be appropriate for other purposes.
Although the Company believes that the expectations reflected in
such forward looking statements or information are reasonable,
undue reliance should not be placed on forward looking statements
because the Company can give no assurance that such expectations
will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been
made regarding, among other things: the general stability of the
economic and political environment in which Bellatrix operates; the
timely receipt of any required regulatory approvals; future
commodity prices; currency, exchange and interest rates; and the
regulatory framework regarding royalties, taxes and environmental
matters in the jurisdictions in which Bellatrix operates. Readers
are cautioned that the foregoing list is not exhaustive of all
factors and assumptions which have been used. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Additional information on these and
other factors that could affect Bellatrix’s operations and
financial results are included in reports, including under the
heading “Risk Factors” in the Information Circular and the
Company’s annual information form for the year ended December 31,
2018, on file with Canadian and United States securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com), through the SEC website (www.sec.gov), and at
Bellatrix’s website (www.bxe.com). Furthermore, the forward looking
statements contained herein are made as at the date hereof and
Bellatrix does not undertake any obligation to update publicly or
to revise any of the included forward looking statements, whether
as a result of new information, future events or otherwise, except
as may be required by applicable securities laws.