CALGARY, Oct. 17, 2017 /CNW/ - Western Energy Services
Corp. ("Western") (TSX: WRG) is pleased to announce that it
has completed its previously announced financings with Alberta
Investment Management Corporation ("AIMCo") providing for a
$215 million second lien senior
secured term loan facility (the "Second Lien Facility") and
a private placement (the "Private Placement") of 9.1 million
common shares of Western ("Common Shares") at a price of
$1.25 per Common Share for gross
proceeds of $11,375,000. In
conjunction with the closing of the Second Lien Facility, Western
has issued 7,099,546 warrants to purchase Common Shares to AIMCo
(the "Warrants"). Each Warrant will entitle AIMCo to acquire
one Common Share at an exercise price per Common Share equal to
$1.77 at any time prior to
October 17, 2020.
Western has also closed its previously announced bought deal
offering of Common Shares (the "Bought Deal"). Pursuant to
the Bought Deal, Western issued 9.1 million Common Shares at a
price of $1.25 per Common Share for
gross proceeds of $11,375,000. The
syndicate of underwriters for the Bought Deal was led by Peters
& Co. Limited.
Additionally, Western has completed a number of amendments to
its credit facilities, led by HSBC Bank Canada, including the
following:
- Extended the maturity of its revolving credit facility (the
"Revolving Facility") and its committed operating line (the
"Operating Facility" and together with the Revolving
Facility, the "Credit Facilities") to December 17, 2020;
- Increased the limit of the Revolving Facility from $50.0 million to $70.0
million, while the $10.0
million Operating Facility limit remains unchanged;
- The interest coverage and current ratio covenants have been
permanently removed;
- A debt service coverage covenant has been added, which is
calculated based on EBITDA, as defined in the Credit Facilities
agreement, divided by the sum of interest expense and scheduled
long term debt principal repayments. This covenant will only be
tested when the outstanding principal under the Credit Facilities
exceeds $40.0 million or net book
value of property and equipment is less than $500.0 million. If applicable, the debt service
coverage ratio must meet or exceed 1.0 as at and prior to
March 31, 2018, 1.25 as at
June 30, 2018, 1.5 as at September 30, 2018 and December 31, 2018, and 2.0 thereafter; and
- The Revolving Facility will continue to include an accordion
feature, whereby an incremental $50.0
million of borrowing would be available, subject to approval
of the lenders.
Western expects that the net proceeds of the Second Lien
Facility, Private Placement and Bought Deal Financing, along with
cash on hand and funds available under the Credit Facilities, will
be used to redeem its outstanding 77/8% senior unsecured
notes (the "Senior Notes") in the first quarter of 2018 when
the Senior Notes will be redeemable at par. Further updates on
the timing and mechanics of the Senior Notes redemption will be
provided in due course.
About Western
Western is an oilfield service company
which provides contract drilling services in Canada through its Horizon Drilling division
and in the United States through
its wholly-owned subsidiary, Stoneham Drilling Corporation. In
Canada, Western also provides well
servicing through its Eagle Well Servicing division and provides
oilfield rental services through its Aero Rental Services
division.
About AIMCo
AIMCo is one of Canada's largest and most diversified
institutional investment managers with more than $100 billion of assets under management.
Established on January 1, 2008,
AIMCo's mandate is to provide superior long-term investment results
for its clients. AIMCo operates at arm's-length from the Government
of Alberta and invests globally on
behalf of 32 pension, endowment and government funds in the
Province of Alberta.
Forward Looking Statements and Information
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information or statements.
More particularly and without limitation, this press release
contains forward-looking statements and information relating to the
use of the net proceeds of the Second Lien Facility, Private
Placement and Bought Deal, and the expected redemption of all
remaining Senior Notes. These forward-looking statements and
information are based on certain key expectations and assumptions
made by Western. Although Western believes that the expectations
and assumptions on which such forward-looking statements and
information are based are reasonable, undue reliance should not be
placed on the forward-looking statements and information as Western
cannot give any assurance that they will prove to be correct. Since
forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
These include, but are not limited to, risks associated with
general economic conditions, the demand for Western's services,
volatility in market prices for oil and natural gas and the effect
of this volatility on the demand for oilfield services generally,
currency exchange rate risk, compliance with covenants and/or
repayment obligations under the Credit Facilities and the indenture
governing the Senior Notes, changes in legislation, dependence on,
and concentration of, major customers, and the creditworthiness and
performance by the Western's counterparties and customers.
Readers are cautioned that the foregoing list of risks and
uncertainties is not exhaustive. Additional information on these
and other risk factors that could affect Western's operations or
financial results are included in Western's annual information form
and may be accessed through the SEDAR website (www.sedar.com). The
forward-looking statements and information contained in this press
release are made as of the date hereof and Western does not
undertake any obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
The securities referenced herein have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, or
any state securities laws. This press release is not an offer of
any securities for sale in the United
States. The securities may not be offered or sold in
the United States absent
registration or an exemption from registration. The securities will
not be publicly offered in the United
States.
SOURCE Western Energy Services Corp.