CALGARY, AB, April 12, 2021
/CNW/ - SECURE Energy Services Inc. ("SECURE", the
"Corporation") (TSX: SES) announced today that S&P Global
Ratings ("S&P") has provided an initial issuer credit rating on
the Corporation of "B" with a positive outlook following the merger
announcement with Tervita Corporation ("Tervita") last month. This
represents the Corporation's first public issuer credit rating and
the S&P rating is expected to increase transparency and
comparability for debt investors and other capital market
participants.
On March 8, 2021, SECURE and Tervita entered into
an arrangement agreement to combine in an all-share transaction,
creating a stronger midstream infrastructure and environmental
solutions business (the "Transaction"). Upon completion of the
Transaction, pursuant to which SECURE will acquire all of the
issued and outstanding common shares of Tervita (the "Tervita
Shares") on the basis of 1.2757 common shares of SECURE (the
"SECURE Shares") for each outstanding Tervita Share, SECURE and
Tervita shareholders will own approximately 52% and 48%,
respectively, of the combined company. The combined company will
operate as SECURE and remain listed on the Toronto Stock Exchange
("TSX") as TSX: SES.
The Transaction combines highly complementary midstream
infrastructure asset bases and environmental service lines, which
are expected to materially enhance scale and utilization and
provide operating efficiencies for the combined company's
customers. Significant estimated annual integration cost savings of
$75 million are expected to be
realizable within 12 to 18 months after closing, contributing to
the pro forma discretionary free cash flow profile.
Maintaining financial discipline will continue to be a key
priority for SECURE following the close of the Transaction. The
Corporation's strong pro forma financial position with attractive
free cash flow generation is expected to provide increased
flexibility for debt repayment and help achieve the combined
company's target debt to EBITDA ratio of less than 2.5x, which is
expected to be achieved within two years of closing.
Transaction Update
Shareholder Approval of Transaction
SECURE and Tervita expect to file a joint information circular
(the "Circular") with respect to the securityholder approvals that
are required for the Transaction in mid-May, 2021. The Circular
will contain a detailed description of the Transaction and will be
available on SEDAR at www.sedar.com as well as SECURE and Tervita's
websites. All SECURE and Tervita shareholders are urged to read the
Circular once available as it will contain important information
concerning the Transaction.
The Transaction will require approval by holders of at least 66⅔
percent of holders of the Tervita Shares represented in person or
by proxy at a special meeting of Tervita securityholders to be
called to consider the Transaction (the "Tervita Meeting").
The issuance of the SECURE Shares pursuant to the Transaction
will require approval by holders of a simple majority of SECURE
Shares represented in person or by proxy at a special meeting of
SECURE shareholders to be called to consider the issuance of SECURE
Shares pursuant to the Transaction (the "SECURE Meeting").
The SECURE Meeting and Tervita Meeting are expected to take
place on June 15, 2021, in virtual
only formats which will be conducted via live audio webcast.
Further information on how to attend the Meetings, along with
voting instructions for shareholders of record on May 4, 2021, will be included in the
Circular.
The Transaction is also subject to approval by the Alberta Court of Queen's Bench and the TSX,
receipt of requisite approvals under the Competition Act
(Canada), and other customary
closing conditions being met, as well as the entering into of the
previously-announced new credit facility by SECURE and its
syndicate of lenders.
Initiation of Noteholder Consent Solicitation Process
Tervita has commenced a consent solicitation process to obtain
certain consents from the holders of Tervita's outstanding
US$500 million aggregate principal
amount of 11% senior second lien secured notes due 2025 (the
"Tervita Notes") to facilitate completion of the Transaction. For
further information regarding the consent solicitation, please
refer to the April 12, 2021, press
release issued by Tervita, which can be found on SEDAR or at
www.tervita.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
"forward-looking statements" and/or "forward-looking information"
within the meaning of applicable securities laws (collectively
referred to as "forward-looking statements"). When used in
this press release, the words "achieve", "enhance", "expect",
"plan", "position", "priority", "realize", "result", "strategy",
"target" and "will", and similar expressions, as they relate to
SECURE or the combined company, or their respective management, are
intended to identify forward-looking statements. Such statements
reflect the current views of SECURE with respect to future events
and operating performance and speak only as of the date of this
press release.
In particular, this press release contains or implies
forward-looking statements pertaining to: expectations with
respect to the strength of the combined company; the relevance of
SECURE's credit rating to debt investors and capital market
participants; the pro forma equity ownership of the combined
company; the complementary nature of the combined company's asset
base and environmental solution business lines, and the ability to
enhance scale, increase utilization, and improve operating
efficiencies; expected annual integration cost savings of the
combined company; the combined company's expected discretionary
free cash flow profile; debt repayment plans; the ability to
achieve the combined company' target debt to EBITDA ratio of less
than 2.5x; anticipated closing conditions and regulatory approvals
required pursuant to the Transaction; the meetings of each of
SECURE's and Tervita's shareholders, including the record and
meeting dates; the Circular prepared in connection therewith and
the expected publication date thereof.
Forward-looking statements involve significant known and unknown
risks and uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether such results will be achieved. Readers are
cautioned not to place undue reliance on these statements as a
number of factors could cause actual results to differ materially
from the results discussed in these forward-looking statements,
including but not limited to those factors referred to under the
heading "Risk Factors" in our Annual Information Form for the year
ended December 31, 2020, which is
available on SEDAR at www.sedar.com.
Although forward-looking statements contained in this press
release are based upon what the Corporation believes are reasonable
assumptions, the Corporation cannot assure investors that actual
results will be consistent with these forward-looking statements.
The forward-looking statements in this press release are expressly
qualified by this cautionary statement. Unless otherwise required
by law, SECURE does not intend, or assume any obligation, to update
these forward-looking statements.
Credit ratings are intended to provide an independent measure of
the credit quality of an issue of securities. The credit
rating assigned by a rating agency is not a recommendation to
purchase, hold or sell securities nor does the rating comment on
market price or suitability for a particular investor. A
rating may not remain in effect for any given period of time and
may be revised or withdrawn entirely by a rating agency at any time
in the future, if, in its judgment, circumstances so warrant.
There can be no assurance that a credit rating will be maintained
in the future. Downgrades in SECURE's credit rating could
adversely affect SECURE's business, cash flows, financial
condition, operating results and share and debt prices.
ABOUT SECURE
SECURE is a publicly traded energy business listed on the
Toronto Stock Exchange providing industry leading customer
solutions to upstream oil and natural gas companies operating in
western Canada and certain regions
in the United States through its
network of midstream processing and storage
facilities, crude oil and water pipelines, and crude by rail
terminals
located throughout key resource plays in western
Canada, North Dakota and Oklahoma. SECURE's core midstream
infrastructure operations generate cash flows from oil production
processing and disposal, produced water disposal, and crude oil
storage, logistics, and marketing. SECURE also provides
comprehensive environmental and fluid management for landfill
disposal, onsite abandonment, remediation and reclamation,
drilling, completion and production operations for oil and gas
producers in western Canada.
Website: www.secure-energy.com
TSX Symbol: SES
SOURCE SECURE Energy Services Inc.