Offer Results in a CAD$0.52 Per Share Distribution or 6.7% Yield (to
Frontera's Share Price Prior to the Offer's Announcement) Assuming
Full and Pro-Rata Shareholder Participation
Over US$83
Million Returned to Shareholders in 2024, Including
Successful Completion of the Offer
Additional Dividends, Share Buybacks, Bond
Buybacks or Other Investor Initiatives May Be Considered in the
Future
CALGARY,
AB, Dec. 16, 2024 /PRNewswire/ - Frontera
Energy Corporation (TSX: FEC) ("Frontera" or the
"Company") announces that its board of directors (the
"Board") has approved the commencement of a second
substantial issuer bid (the "Offer") pursuant to which the
Company will offer to purchase from holders ("Shareholders")
of common shares of the Company (the "Shares") up to
3,500,000 Shares for cancellation at a purchase price of
CAD$12.00 per Share (the
"Purchase Price"), for an aggregate purchase price
not exceeding CAD$42,000,000
(equivalent to US$30,000,000).
The Offer is expected to commence on December 19, 2024, and remain open for acceptance
until 5:00 p.m. (Eastern time) on
January 24, 2025, unless extended,
varied or withdrawn by the Company (the "Expiration Date").
Pursuant to the Offer, tendering Shareholders will have the right
to elect to tender a specified number of Shares.
The Company plans to fund the Share repurchases through
available cash on hand. The Offer is denominated in Canadian
dollars, and Shareholders will have the option to elect to receive
payment in either Canadian or United
States dollars.
Purpose of the Offer
As part of its efforts to maximize value for Shareholders and
following the highly participated substantial issuer bid announced
in September 2024 and completed in
October 2024, the Company has
identified this Offer as an attractive and efficient means to
return further capital to Shareholders. Upon successful completion
of the Offer, the Company will have returned over US$83 million of capital to its shareholders this
year, including US$30 million from
the October 2024 substantial issuer
bid, US$15.2 million in declared
dividends and US$7.8 million of share
repurchases through the Company's normal course issuer bid
program.
On November 5, 2024, the last full
trading day prior to the date of announcement of the Company's
intention to make the Offer, the closing price of the Shares on the
Toronto Stock Exchange was CAD$7.71
per Share.
Assuming full and pro-rata shareholder participation, the Offer
represents a CAD$0.52 per Share
distribution equivalent to a 6.7% yield on the Company's stock
price prior to the announcement of the Offer in the Company's third
quarter 2024 results. Including all dividends declared this year,
the year-to-date distribution total to shareholders would be
CAD$1.27 per Share (equivalent to a
16.5% yield).
The Board shall continue to consider future investor initiatives
in the remainder of 2024 and beyond, including potential additional
dividends, share buybacks, bond buybacks or other initiatives,
based on the overall results of the business, oil prices and the
Company's strategic goals.
Frontera intends to file with the Toronto Stock Exchange (the
"TSX") a notice of intention to commence a normal course
issuer bid for its Shares subsequent to the completion of the Offer
(the "NCIB"). If accepted by the TSX, the Company would be
permitted under the NCIB to purchase for cancellation, during a
12-month period, up to that number of Shares equal to the greater
of (i) 5% of the Company's issued and outstanding Shares and (ii)
10% of the Company's "public float" (as such term is defined in the
TSX Company Manual).
Purchase Price
Frontera will pay the Purchase Price of CAD$12.00 per Share for each validly deposited
Share taken up by the Company up to a maximum of 3,500,000 Shares,
for an aggregate purchase price not exceeding CAD$42,000,000 (equivalent to US$30,000,000).
Each Shareholder who has properly deposited Shares and who has
not withdrawn such Shares will receive the Purchase Price, payable
in cash (subject to applicable withholding taxes, if any), for all
Shares taken up by the Company upon the terms and subject to the
conditions of the Offer.
If more than 3,500,000 Shares are tendered for purchase, the
Company will purchase the Shares on a pro rata basis. In that case,
Shares that are tendered but not purchased, will be returned to
Shareholders.
Manner of Tender
Pursuant to the terms and subject to the conditions of the
Offer, Shareholders wishing to tender to the Offer may do so by
making an election to tender a specified number of Shares
(representing, in the Shareholders' discretion, all or a portion of
the Shareholders' Shares) at the Purchase Price.
Additional Information
As of December 11, 2024, the
Company had 80,793,387 issued and outstanding Shares. The Offer
will be for up to approximately 4.33% of the total number of issued
and outstanding Shares on a non-diluted basis.
The Offer is optional for all Shareholders, who are free to
choose whether to participate, and if they participate how many
Shares to tender. Any Shareholders who do not deposit their Shares
(or whose Shares are not purchased under the Offer) will realize a
proportionate increase in their equity interest in the Company, to
the extent that Shares are purchased under the Offer.
The terms and conditions of the Offer, including instructions
for tendering Shares, will be included in the formal offer to
purchase and issuer bid circular, letter of transmittal, notice of
guaranteed delivery and other related documents (the "Offer
Documents"). On or about December 19,
2024, the Offer Documents will be sent to registered
Shareholders, filed with applicable Canadian securities regulatory
authorities, and made available without charge on SEDAR+
at www.sedarplus.ca.
In light of the Canada Post workers' strike and the resulting
disruption of mail services, the Company may be unable to mail the
Offer Documents to beneficial (non-registered) holders. However,
upon resumption of normal mail service, the Company intends to
arrange for the mailing of the Offer Documents to the beneficial
holders to be completed.
Beneficial holders can retrieve the Offer Documents on
www.sedarplus.ca. Copies of Offer Documents may also be obtained
upon written or oral request, without charge, to the Company at the
Company's head office at Suite 2000, 222 - 3rd Avenue SW,
Calgary, Alberta, Canada, T2P 0B4
or by email at generalcounsel@fronteraenergy.ca.
The Offer is not conditional upon any minimum number of Shares
being tendered. However, the Offer will be subject to other
conditions described in the Offer Documents. Frontera reserves the
right, subject to applicable laws, to withdraw, extend or amend the
Offer, if certain events occur at any time prior to the payment for
the tendered Shares.
The Catalyst Capital Group Inc. ("Catalyst") and Gramercy
Funds Management LLC ("Gramercy" and, together with
Catalyst, the "Principal Shareholders") are the
beneficial owners of, or exercise control or direction over,
33,262,348 and 10,808,311 Shares, respectively, which in the
aggregate represent approximately 54.55% of all issued and
outstanding Shares. Each of Catalyst and Gramercy has advised the
Company that their current intention is to deposit Shares pursuant
to the Offer, however, their decision to participate in the Offer
is subject to market conditions and other factors. Each of Catalyst
and Gramercy reserves the right, without notice and for any or no
reason, to change its investment decision at any time prior to the
Expiration Date. In addition, certain directors and officers of the
Company have expressed an intention to tender 244,568 Shares to the
Offer.
The Company has engaged Computershare Investor Services Inc. to
act as depositary for the Offer and BMO Nesbitt Burns Inc. to act
as financial advisor and dealer manager. Shareholders who have
questions regarding the Offer or require any assistance tendering
Shares may contact Computershare Investor Services Inc. by
telephone at 1-800-564-6253 (North
America) or 514-982-7555 (International), or by e-mail at
corporateactions@computershare.com, or BMO Nesbitt Burns Inc. by
email at FronteraSIB@bmo.com.
The Offer referred to in this news release has not yet
commenced. This news release is for informational purposes only and
does not constitute an offer to buy or the solicitation of an offer
to sell Shares. The solicitation and the offer to buy Shares will
only be made pursuant to the Offer Documents to be filed with the
applicable Canadian securities regulatory authorities. The Offer
will not be made to, nor will tenders be accepted from or on behalf
of, holders of Shares in any jurisdiction in which the making or
acceptance of offers to sell Shares would not be in compliance with
the laws of that jurisdiction. None of Frontera, its Board or the
depositary makes any recommendation to Shareholders as to whether
to tender or refrain from tendering any or all of their Shares
pursuant to the Offer. Shareholders are strongly urged to read the
Offer Documents carefully and consult with their financial, tax and
legal advisors prior to making any decision with respect to the
Offer.
About Frontera
Frontera Energy Corporation is a Canadian public company
involved in the exploration, development, production,
transportation, storage and sale of oil and natural gas in
South America, including related
investments in both upstream and midstream facilities. The Company
has a diversified portfolio of assets with interests in 22
exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in
Colombia. Frontera is committed to
conducting business safely and in a socially, environmentally and
ethically responsible manner.
If you would like to receive News Releases via e-mail as soon as
they are published, please subscribe here:
http://fronteraenergy.mediaroom.com/subscribe.
Forward-Looking Statements
This news release contains forward-looking information or
forward-looking statements (collectively, "forward-looking
statements") within the meaning of applicable securities laws,
including statements as to the Company's current intentions
regarding commencement of the Offer, the timing, terms and
conditions of the Offer, the participation of the Principal
Shareholders and certain directors and officers, the number of
Shares to be purchased and the amount of capital returned to
Shareholders under the Offer, the consideration of future investor
initiatives in 2024 and beyond, the Company's intention to initiate
the NCIB subsequent to completion of the Offer and the
Company's intention to mail the Offer Documents to beneficial
holders upon resumption of normal mail service. Any such
forward-looking statements are based on information currently
available to us and are based on assumptions and analyses made by
us in light of our experience and our perception of historical
trends and current market and other conditions. Readers should also
refer to the risk factors set forth in the Company's annual
information form and management's discussion and analysis for the
year ended December 31, 2023, each
dated March 7, 2024, available on
SEDAR+ at www.sedarplus.ca. There can be no assurance that the
plans, intentions, or expectations upon which forward-looking
statements are based will be realized. Actual results may differ,
and the difference may be material and adverse to the Company and
its Shareholders.
Social Media
Follow Frontera's social media channels at the following
links:
Twitter: https://twitter.com/fronteraenergy?lang=en
Facebook: https://es-la.facebook.com/FronteraEnergy/
LinkedIn:
https://co.linkedin.com/company/frontera-energy-corp
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SOURCE Frontera Energy Corporation