CALGARY, AB,
March 30, 2022 /CNW/ -
Western Energy Services Corp. (the "Company" or
"Western") (TSX: WRG) announces that it has filed a
preliminary short form prospectus (the "Preliminary
Prospectus") with the securities regulatory authorities in all
the provinces of Canada with
respect to a proposed rights offering to its shareholders to raise
$31.5 million (the "Rights
Offering"). The Company has also concurrently filed a
registration statement on Form F-7 with the United States
Securities and Exchange Commission in the
United States relating to the Rights Offering.
As described in the Company's press release dated March 22, 2022, the Company has entered into a
debt restructuring agreement (the "Debt Restructuring
Agreement") with Alberta Investment Management Corporation.
("AIMCo"), the lender under its second lien term loan
facility (the "Second Lien Facility"), with respect to a
debt restructuring transaction (the "Restructuring
Transaction") which includes the conversion of $100 million of the principal amount outstanding
under the Second Lien Facility into common shares of the Company
(the "Common Shares") and an extension of the maturity
date of the Second Lien Facility to the fourth anniversary of the
closing date of the Restructuring Transaction. Additional
information regarding the Restructuring Transaction and the
transactions related thereto is included in the Company's
March 22, 2022 press release and in
the Preliminary Prospectus.
As a condition to the completion of the Restructuring
Transaction, the Company is required to complete the Rights
Offering to its shareholders to raise proceeds of $31.5 million. Under the Rights Offering, each
shareholder of the Company on a record date to be determined prior
to filing the Final Prospectus (as defined below) for the Rights
Offering (the "Record Date") will be entitled to receive one
right (a "Right") for each Common Share held. Each Right
will entitle a holder to purchase a number of Common Shares (the
"Basic Subscription Privilege") at the Subscription Price
(as defined below) such that the total proceeds of the Rights
Offering will be $31.5 million. Under
the Debt Restructuring Agreement, the subscription price (the
"Subscription Price") at which each Common Share will be
issued upon the exercise of Rights will be $0.016 per share. However, the Subscription Price
is subject to reduction, if necessary to comply with the pricing
requirements of National Instrument 41-101 or the Toronto Stock
Exchange ("TSX") regarding the required discount to
market price at the time of filing the Final Prospectus. The Rights
will also entitle any shareholder who fully exercises the Basic
Subscription Privilege attached to their Rights to subscribe for
additional Common Shares pursuant to an additional subscription
privilege, all as described in more detail in the Preliminary
Prospectus.
Under the Rights Offering, any Rights that would otherwise be
distributed by the Company to shareholders who are not resident in
the provinces of Canada or
the United States, will instead be
delivered to the subscription agent appointed by the Company, who
will hold such Rights as agent for the benefit of all such
ineligible holders. Further information regarding the treatment of
Rights issued to shareholders resident in ineligible jurisdictions
is included in the Preliminary Prospectus.
G2S2 Capital Inc. ("G2S2"), G2S2's subsidiary Armco
Alberta Inc. ("Armco"), Ronald P.
Mathison and Matco Investments Ltd. ("Matco"),
currently the Company's largest shareholders, have entered into a
standby purchase agreement (the "Standby Purchase
Agreement") with the Company wherein G2S2, Matco, and Mr.
Mathison have agreed to exercise in full their Basic Subscription
Privilege and, in the case of each of G2S2, Armco and Matco
(collectively, the "Standby Purchasers"), subscribe for
any shares not subscribed for by other eligible shareholders under
the Rights Offering (the "Standby Commitment"), either
directly or through an affiliate. The proceeds of the Rights
Offering will be applied to reduce the principal amount outstanding
under the Second Lien Facility by $10
million, with the remaining $21.5
million being applied to fund maintenance and growth capital
for the Company and for general corporate purposes. AIMCo has
agreed that it will not exercise the Rights issued to it in the
Rights Offering.
Following a review of the Preliminary Prospectus by the Canadian
securities regulators, the Company expects to file a final short
form prospectus (the "Final Prospectus") and to deliver the
Final Prospectus to its shareholders who hold Common Shares on the
Record Date. The Rights Offering will be open for at least 21 days.
It is expected that the Record Date will be a date, to be announced
by the Company when such date is determined, in early to
mid-April 2022 and that the expiry
date of the Rights Offering and the closing date of the Rights
Offering and Debt Restructuring will be in early May 2022. The Rights Offering and the Debt
Restructuring Agreement are subject to a number of conditions,
including receipt of any necessary regulatory approvals and the
approval of the Toronto Stock Exchange.
Further, more detailed information regarding the Rights Offering
is included in the Preliminary Prospectus which is filed on SEDAR
under Western's profile at www.sedar.com and the Form F-7
registration statement which is filed with the United States
Securities and Exchange Commission on EDGAR at www.sec.gov.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
securities of the Company in any province, state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
the registration or qualification under the securities laws of any
such province, state or jurisdiction.
About Western
Western is an oilfield service company which provides contract
drilling services through its division, Horizon Drilling in
Canada, and its wholly owned
subsidiary, Stoneham Drilling Corporation in the United States. Additionally, Western
provides production services in Canada through its wholly-owned subsidiary
Western Production Services Corp. and through its division, Eagle
Well Servicing which provides well servicing, and its division Aero
Rental Services which provides oilfield rental services.
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", "will", "outlook" 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 regarding the
Restructuring Transaction; the terms of the Rights Offering; the
conduct of the Rights Offering; the determination of the
Subscription Price for the Rights Offering; the size of the Rights
Offering; the intended use of proceeds of the Rights Offering; the
participation of certain security holders in the Rights Offering,
including the Standby Purchasers, G2S2, Ronald Mathison and AIMCo; the expected
record date for the Rights Offering, the timing for the Rights
Offering; the anticipated closing date of the Rights Offering and
Debt Restructuring; and the conditions of the Restructuring
Transaction and the Rights Offering.
These forward‐looking statements and information are based on
certain key expectations and assumptions made by Western in light
of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors that the Company believes are appropriate in the
circumstances. 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 relating to the
Company's need for significant additional future capital and the
Company's ability to raise additional funding; risks relating to
the influence of significant shareholders of the Company over the
Company's business operations and share price; risks associated
with the potential further deterioration of industry conditions
that could negatively affect Western's performance and financial
condition; the risk that any of the conditions set forth in the
agreements providing for the Debt Restructuring are not satisfied
on a timely basis, including receipt of TSX approval on
satisfactory conditions, or other termination events under such
agreements occur; and Western's inability to meet its obligations
under its credit facilities such that further financing is not
available.
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.
SOURCE Western Energy Services Corp.