- Calfrac's Amended Recapitalization Transaction is the best alternative for Shareholders. It remains the only transaction being voted on at the upcoming Meetings and the only transaction capable of implementation. Today's amendments provide Shareholders with significantly improved economics, optionality and certainty
- Shareholders can elect to receive
$0.15 in cash per Common Share AND receive two Warrants - Alternatively, Shareholders can elect to retain their Common Shares AND receive two Warrants
- Each Warrant entitles the Shareholder to purchase one Common Share of Calfrac for a period of three years at a price of
$0.05 per Common share (on a pre-consolidation basis) - Calfrac's Senior Unsecured Noteholders, to whom Calfrac is indebted in the amount of
US$431.8 million in principal, plus accrued interest, continue to support the Amended Recapitalization Transaction - The Amended Recapitalization Transaction preserves Calfrac's independence, as well as its ability to pursue and consummate future value-enhancing or change of control transactions, in more advantageous market conditions. The issuance of Warrants provides Shareholders with further upside
- In the event that the Amended Recapitalization Transaction is not completed Company has agreed to implement the original Recapitalization Transaction (without the cash option or the warrants) under CCAA proceedings. Under CCAA proceedings, Shareholders can expect to receive a reduced recovery than they would receive under the Amended Recapitalization Transaction
- The
Wilks Brothers Offer is not in the best interests of Calfrac or its Shareholders. There is no reasonable prospect of the Wilks Brothers Offer being completed and it does not address the obligations under the Senior Unsecured Notes that rank in priority to Shareholders - The situation is unchanged. The Calfrac Board of Directors continues to unanimously recommend Shareholders and Senior Unsecured Noteholders VOTE FOR the Amended Recapitalization Transaction Only on the White Management Proxy/VIF
- DO NOT vote on the Wilks Brothers Blue Proxy/VIF
- TAKE NO ACTION and DO NOT TENDER your shares to
Wilks Brothers' hostile takeover bid
Summary of Amended Recapitalization Transaction
The amended Recapitalization Transaction (the "Amended Recapitalization Transaction") provides for improved economics for the holders (the "Shareholders") of the Company's common shares ("Common Shares"). It also provides an option for Shareholders to either retain or monetize their Common Shares (subject to proration as described below), while receiving Warrants (as defined below) to continue to participate in the future of Calfrac, in either case. The following are additions to the existing terms of the Original Recapitalization Transaction:
- each Shareholder will have the opportunity to elect for Calfrac to repurchase all or any portion of the Common Shares held by such Shareholder (the "Shareholder Cash Election") for
$0.15 per share (on a pre-consolidation basis), subject to maximum aggregate consideration in respect of the Shareholder Cash Election of$10 million ; and - each Shareholder will receive two (2) common share purchase warrants (the "Warrants") for each Common Share held (whether or not such Shareholder has elected to participate in the Shareholder Cash Election), with each Warrant exercisable for a period of three years into one Common Share at a price of
$0.05 per Common Share (on a pre-consolidation basis) or$2.50 per Common Share (on a post-consolidation basis).
"A consensual transaction supported by our stakeholders has been a key focus for Calfrac," said
The Amended Recapitalization Transaction is the result of lengthy negotiations with Senior Unsecured Noteholders, and the advice of legal and financial advisors under the guidance of the special committee (the "Special Committee") of the board of directors of the Company (the "Board"). Upon the recommendation of the Special Committee, the Board unanimously recommends that Senior Unsecured Noteholders and Shareholders support and VOTE FOR the Amended Recapitalization Transaction using only the White Management Proxy/VIF. Shareholders that have previously voted against the Original Recapitalization Transaction are encouraged to vote again FOR the Amended Recapitalization Transaction, based on the significant improvement in value to Shareholders. Only your last vote will be counted.
Clear Benefits of Calfrac's Amended Recapitalization Transaction
Calfrac continues to have an urgent need to recapitalize itself. Calfrac remains in default of its indebtedness to the Senior Unsecured Noteholders, in the amount of
- The Amended Recapitalization Transaction provides significantly improved value to Shareholders while also enabling those that may wish to monetize their investment with a cash election to do so. Shareholders can keep their newly enhanced equity Warrant exposure AND cash out all or part of their equity entitlement (subject to any proration as described below). Alternatively, those that want to remain invested can retain both.
- The provision of equity Warrants provides Shareholders with significant value and exposure to the upside potential of a recapitalized Calfrac when the market for its services improves.
- The Amended Recapitalization Transaction preserves Calfrac's independence, free of competitor control and able to pursue future value enhancing or change of control transactions, in more advantageous market conditions.
- The Amended Recapitalization Transaction can be implemented and provides certainty.
- Calfrac's Board, on the recommendation of the Special Committee, has issued its Directors' Circular and is unanimously recommending REJECTING
Wilks Brothers' unsolicited tender offer, which is highly unlikely to be completed, seeks to avoid compliance with Canadian take-over bid legislation and does not represent a better alternative to the Amended Recapitalization Transaction. Shareholders are advised to TAKE NO ACTION and NOT TENDER their shares to a bid that very likely will never be taken up. Shareholders that may have already tendered their shares are reminded they have the right to WITHDRAW their tender.
Shareholders and Unsecured Noteholders should VOTE FOR the Amended Recapitalization Transaction only on the White Management Proxy/VIF. DO NOT vote on the Wilks Brothers Blue Proxy/VIF.
TAKE NO ACTION with respect to the Wilks Brothers hostile take-over bid and DO NOT TENDER your shares to the offer.
Meeting Date Postponed to
To permit Shareholders and Senior Unsecured Noteholders to consider the Amended Recapitalization Transaction, on
In connection with the Amended Recapitalization Transaction, Calfrac continues to have the support of the holders of the Initial Consenting Noteholders and holders of approximately 25% of the outstanding Common Shares. Such Senior Unsecured Noteholders and Shareholders have agreed to vote in favour of the Company's amended plan of arrangement (the "Plan of Arrangement") pursuant to which the Amended Recapitalization Transaction is to be implemented in the Company's proceedings under the Canada Business Corporations Act (the "CBCA").
The Company is also announcing that the Funding Deadline and the Commitment Party Funding Deadline, as such terms are defined in the Information Circular, in respect of the offering of the Company's new 10% senior secured convertible payment-in-kind notes (the "New 1.5 Lien Notes") have been extended to
Calfrac Board Unanimously Rejects
The Special Committee has carefully reviewed all of the elements, and all of the terms and conditions, of the take-over bid of
Accordingly, the Board UNANIMOUSLY recommends that Shareholders REJECT the Wilks Brothers offer, TAKE NO ACTION and NOT TENDER Common Shares to the Wilks Brothers offer.
- the Amended Recapitalization Transaction provides greater value to Shareholders than a CCAA proceeding;
- Calfrac's Amended Recapitalization Transaction is an executable transaction that provides Shareholders with improved economics and greater optionality and certainty than any alternative to the Amended Recapitalization Transaction;
- it is in the best interests of Calfrac to pursue Calfrac's Amended Recapitalization Transaction;
- there is no reasonable prospect that the Wilks Brothers Offer will be completed as it does not address the
US$431.8 million in principal, plus accrued interest, owing in respect of the Senior Unsecured Notes. The claims of Senior Unsecured Noteholders rank in priority to the claims of Shareholders; - The Initial Consenting Noteholders have agreed to the enhanced economics for Shareholders under the Amended Recapitalization Transaction with a view to completing the transaction on a consensual and efficient basis for the benefit of the Company and its stakeholders. However, if the Amended Recapitalization Transaction is not completed, the Senior Unsecured Noteholders are expected to exercise their rights to complete the Original Recapitalization Transaction (without the Shareholder Cash Election or Warrants) in a CCAA proceeding. In this scenario, the Wilks Brothers Offer will not be completed because it is conditional on the Amended Recapitalization Transaction being terminated;
- in the event that the Amended Recapitalization Transaction is not completed and CCAA proceedings are commenced, Shareholders can expect to receive a reduced recovery than they would receive under the Amended Recapitalization Transaction; and
- the
Wilks Brothers Offer must meet the statutory minimum condition of shares representing more than 50% of the Common Shares that it does not already own being tendered. This condition cannot be waived byWilks Brothers , although it has indicated its intention to seek an exemption to this rule. Shareholders should be aware that there is no precedent for a waiver of the statutory minimum condition which is at the very heart of the take-over bid rules. This condition to the Wilks Brothers Offer is highly unlikely to be met and therefore the likelihood of Shareholders receiving any value under the Wilks Brothers Offer is remote.
The Amended Recapitalization Transaction is the best alternative for Shareholders.
Should the Amended Recapitalization Transaction not be approved by Senior Unsecured Noteholders and Shareholders, in the absence of any transaction that is capable of receiving broad support throughout the Company's capital structure, the Company expects to proceed to complete the original Recapitalization Transaction (without the cash option or the warrants) under CCAA proceedings, with the support and at the request of the Senior Unsecured Noteholders. Completion of the transaction under the CCAA will result in a reduced recovery to Shareholders as compared to the Amended Recapitalization Transaction.
Further details regarding the Special Committee's and Board's recommendation are available in the Board's Directors' Circular available on Calfrac's SEDAR profile at www.sedar.com and on Calfrac's website at www.calfrac.com.
Details of Amended Recapitalization Transaction
The Company will file a material change report describing the Amended Recapitalization Transaction (the "Material Change Report") on Calfrac's SEDAR profile at www.sedar.com. The Material Change Report, which will include a copy of this news release, will be deemed to be incorporated by reference in the Information Circular, and shall constitute an amendment to the Information Circular, pursuant to the interim order (the "Interim Order") of the
Shareholder Cash Election
Pursuant to the Plan of Arrangement, all Existing Shareholders shall be provided with the opportunity to elect to have Calfrac repurchase all or any portion of Common Shares held by such Shareholder for
Existing Shareholders who do not elect to tender their Common Shares to the Shareholder Cash Election shall retain their Common Shares, subject to the consolidation of the Common Shares on the basis of one (1) Common Share on a post-consolidation basis for every 50 Common Shares on a pre-consolidation basis (the "Share Consolidation") upon completion of the Amended Recapitalization Transaction.
Warrants
Pursuant to the Plan of Arrangement, each Shareholder will receive (whether or not such Shareholder has elected to participate in the Shareholder Cash Election), for each Common Share (on a pre-consolidation basis) held immediately prior the Effective Time, two (2) Warrants. Each Warrant is exercisable for one pre-consolidation Common Share for a period of three (3) years following the effective date of the Plan of Arrangement (the "Effective Date"), with an exercise price of
The current Common Shares will represent 8% of the Common Shares outstanding immediately following implementation of the Amended Recapitalization Transaction, calculated on a non-diluted basis and excluding the Commitment Consideration Shares and any Common Shares repurchased pursuant to the Shareholder Cash Election.
New 1.5 Lien Term Loans
In connection with the Amended Recapitalization Transaction, the Company will borrow up to an aggregate of
Although the New 1.5 Lien Term Loan from
Summary of Amended Plan of Arrangement
The Amended Recapitalization Transaction, contemplates, among other things, the following key elements:
- the continuance of Calfrac into the federal jurisdiction of
Canada under the CBCA; - the provision of the Shareholder Cash Election (not to exceed
$10 million , in the aggregate); - the issuance of the Warrants to all Shareholders (whether or not such Shareholder has elected to participate in the Shareholder Cash Election);
- the exchange of Senior Unsecured Notes for Common Shares (the "Senior Unsecured Note Exchange"), such that: (i) Senior Unsecured Noteholders will receive their pro rata share (based on the face value of the Senior Unsecured Notes) of 86% of the Common Shares outstanding immediately following implementation of the Amended Recapitalization Transaction; and (ii) as early consent consideration for supporting the Amended Recapitalization Transaction and in addition to any Common Shares received by an Early Consenting Noteholder (as defined in the Information Circular) pursuant to (i) above, Early Consenting Noteholders will receive their pro rata share (based on the face value of their Senior Unsecured Notes) of 6% of the Common Shares outstanding immediately following implementation of the Amended Recapitalization Transaction, such percentages calculated prior to the Shareholder Cash Election, and in each case on a non-diluted basis and excluding the Commitment Consideration Shares (as defined below), in full and final settlement of the obligations under the Senior Unsecured Notes;
- each Shareholder will be provided with the opportunity to participate in the Shareholder Cash Election and may elect to have Calfrac repurchase all or any portion of the Common Shares held by such Shareholder for the Cash Election Amount, subject to proration as described above;
- existing Shareholders who retain their Common Shares (other than such Common Shares tendered to the Company pursuant to the Shareholder Cash Election), shall have their Common Shares consolidated pursuant to the Share Consolidation on the basis of one Common Share on a post-consolidation basis for every fifty (50) Common Shares on a pre-consolidation basis;
- an offering of
$60 million in principal amount of New 1.5 Lien Notes: - as to
$45 million , made to G2S2,MATCO and the Ad Hoc Committee and certain other eligible Senior Unsecured Noteholders (collectively, the "Commitment Parties"); and - as to
$15 million , made available to all eligible Senior Unsecured Noteholders, fully backstopped by the Commitment Parties, in consideration for the issuance of Common Shares with a value equal to$1.5 million to such Commitment Parties (the "Commitment Consideration Shares"); - the Company continuing to satisfy its obligations to employees, suppliers, customers and governmental authorities in the ordinary course of business;
- the cancellation of existing stock options for no consideration, and the vesting and payment of all equity-based PSUs, together with the termination of Calfrac's existing PSU Plan and all underlying non-equity based PSUs; and
- the adoption of an Omnibus Incentive Plan for Calfrac, concurrently with the completion of the transactions contemplated by the Plan of Arrangement.
Except as described in this news release, the elements of the Original Recapitalization Transaction remain as described in the Information Circular, in all material respects. Notwithstanding anything to the contrary, all summaries of, and references to, the Amended Recapitalization Transaction in this news release are qualified in their entirety by reference to the complete text of the Plan of Arrangement (as amended), a copy of which will be attached to the Material Change Report. You are urged to carefully read the full text of the Plan of Arrangement (as amended).
In connection with the Amended Recapitalization Transaction, the Company has made available the following documents on Calfrac's SEDAR profile at www.sedar.com and on Calfrac's website at www.calfrac.com:
- the Amending Agreement to the Arrangement Agreement included as Appendix "G" to the Information Circular; and
- the amended Plan of Arrangement and a blackline comparison of the amended Plan of Arrangement to the version included as Appendix "H" to the Information Circular.
The material terms of the Warrants are also set out in a Schedule to this news release.
Pursuant to the Interim Order, the amended Plan of Arrangement shall be the Plan of Arrangement to be submitted to Senior Unsecured Noteholders and Shareholders at the Meetings and shall be the subject of the applicable Senior Unsecured Noteholders Resolution and Shareholders' Arrangement Resolution.
Pursuant to the Amended Recapitalization Transaction and the amended Plan of Arrangement, the disclosure set out under "Description of the Recapitalization Transaction – Plan of Arrangement – Treatment of Shareholders" and "Arrangement Steps" is deemed to be amended and supplemented by the information contained in this news release.
Shareholder Cash Election
In connection with the Shareholder Cash Election, the Company will distribute an amended form of letter of transmittal and election (the "Letter of Transmittal and Election Form").
Shareholders wishing to participate, in whole or in part, in the Shareholder Cash Election (subject to pro-rationing) must make a valid election on or before
Shareholders whose Common Shares are registered in the name of a broker, investment dealer, bank, trust company or other Intermediary, and who wish to participate in the Shareholder Cash Election, should contact that Intermediary for instructions and assistance in making a Shareholder Cash Election in advance of the Election Deadline.
Registered Shareholders not participating in the Shareholder Cash Election are still required to complete, execute and return a Letter of Transmittal and Election to the Depositary in order to receive their post-consolidation Common Shares, as described in greater detail in the Information Circular.
The Letter of Transmittal and Election Form must be accompanied by the certificate representing a Registered Shareholder's Common Shares and all other required documents. A copy of the Letter of Transmittal and Election may be obtained upon request from the Depositary.
See "Procedure for Exchange of Shares" in the Material Change Report for further information.
Shareholders' TSX Warrant Resolution
In accordance with the policies of the TSX, the issuance of Common Shares upon the conversion of the Warrants must be approved by disinterested Shareholders, where the number of Common Shares issuable to insiders of the Company as a group, upon conversion, exceeds 10% of the then issued and outstanding Common Shares (pursuant to section 604(a)(ii) of the TSX Company Manual) (the "TSX Warrant Approval").
Currently, the disinterested Shareholders have been asked to approve, by way of the Shareholders' TSX Note Exchange Resolution, the issuance of Common Shares pursuant to the Senior Unsecured Note Exchange, also pursuant to section 604(a)(ii) of the TSX Company Manual (the "TSX Note Exchange Approval").
This new release serves as notice that the Shareholders' TSX Note Exchange Resolution is being amended to now include both the TSX Warrant Approval and the TSX Note Exchange Approval, and the full text of the amended Shareholders' TSX Note Exchange Resolution (the "Shareholders' TSX Note Exchange and Warrant Resolution") will be attached to the Material Change Report. Shareholders who vote in favour of the Shareholders' TSX Note Exchange Resolution are deemed to have provided both the necessary TSX Warrant Approval and TSX Note Exchange Approval.
For purposes of the Shareholders' TSX Note Exchange and Warrant Resolution as it relates to the TSX Note Exchange Approval, Common Shares held by insiders participating in the Senior Unsecured Note Exchange (including
For purposes of the Shareholders' TSX Note Exchange and Warrant Resolution as it relates to the TSX Warrant Approval, Common Shares held by insiders expected to receive Warrants (including
The vote required to pass the Shareholders' TSX Note Exchange and Warrant Resolution is a majority of the votes cast by the applicable disinterested Shareholders present in person or represented by proxy at the Shareholders' Meeting.
First Lien Credit Agreement
In addition to the amendments described under the heading "First Lien Credit Agreement Amendments" in the Information Circular, Calfrac will seek the consent of the First
Dilution
As at
Assuming that Shareholders elect to participate in the Shareholder Cash Election to the maximum amount of
After giving effect to the issuance and exercise of the Warrants, and assuming that Shareholders elect to participate in the Shareholder Cash Election to the maximum amount of
Percentage of Common Shares as at the | Percentage of Common Shares as at the | |
40.9% | 38.8% | |
10.9% | 11.7% | |
Certain funds and accounts | 10.7% | 10.1% |
Certain funds and accounts | 7.1% | 6.7% |
Notes: | |
(1) | This percentage assumes that Senior Unsecured Noteholders holding 78.1% of the Senior Unsecured Notes will be considered Early Consenting Noteholders and will exercise their full Subscription Privilege under the Pro Rata Offering (with the remaining 21.9% of the Pro Rata Offering to be subscribed for by the Commitment Parties pursuant to their respective Shortfall Commitment), and is calculated on a fully-diluted basis on the assumption that all holders of New 1.5 Lien Notes will convert all New 1.5 Lien Notes into Common Shares at the Conversion Price immediately following the Effective Date. |
(2) | This percentage assumes that: (a) Shareholders, other than |
Recommendation of the Special Committee and the Board
After careful consideration and based on several factors, including lengthy and detailed consultation and negotiations with affected stakeholders and the advice of legal and financial advisors, the Special Committee of the Board of Directors has unanimously recommended that the Board of Directors approve the Amended Recapitalization Transaction. After receiving such recommendation, the Board of Directors has unanimously determined that the Amended Recapitalization Transaction continues to be the best available transaction for the Company, and has authorized its submission to the Senior Unsecured Noteholders, Shareholders and the Court for their respective approvals. The Board of Directors unanimously recommends that all Senior Unsecured Noteholders and Shareholders support and VOTE IN FAVOUR of the Amended Recapitalization Transaction.
Meeting Information
As permitted by the Interim Order, the Meetings currently scheduled to be held on
The Meetings will be held on
The Record Date of
Registered Shareholders as of the Record Date and proxy appointments are entitled to attend and vote at the Shareholders' Meeting. Shareholders and proxy appointments will be entitled to one vote for each Common Share held as at the Record Date.
Voting Information
The deadline for Senior Unsecured Noteholders and Shareholders to submit their proxies or voting instructions in order to vote on the Plan of Arrangement and other items to be considered at the applicable Meeting will been extended to
Shareholders are reminded that they are free to vote their proxies or to revoke their proxies at any time, regardless of whether they have already voted on the Company's white proxy or
Given the significant improvement in Shareholder value being proposed, any Shareholders that may have previously voted against the Original Recapitalization Transaction are encouraged to vote again FOR using the White Management Proxy/VIF. For further details on how to vote or to revoke any proxy, please refer to the sections entitled "Voting of Proxies" and "Revocation of Proxies" in the Information Circular dated and filed under Calfrac's profile on SEDAR at www.sedar.com.
The Early Consent Date, which was
Any Senior Unsecured Noteholders who wish to revoke their proxy or voting instructions in favour of the Senior Unsecured Noteholders' Arrangement Resolution on or prior to the Early Consent Date shall no longer constitute Early Consenting Noteholders for the purposes of the Plan of Arrangement, and shall not receive their pro rata share of the 6%
Any questions or requests for further information regarding voting at the Meetings or revoking proxies should be directed to
Calfrac reminds all stakeholders that information in respect of the Amended Recapitalization Transaction can be found at http://calfrac.investorroom.com/transaction. If you have any questions regarding the above, or related to the Amended Recapitalization Transaction, please contact
Noteholder Support Agreement Amendments; Alternative Proceedings under CCAA
In accordance with the terms of the Noteholder Support Agreement and the Commitment Letter, the Company has received the approval of the Consenting Noteholders to the amendments to the Original Recapitalization Transaction.
In connection with negotiating the terms of the Amended Recapitalization Transaction, upon the requirement of the Initial Consenting Noteholders, the Company has agreed that in the event the "CBCA Condition" (as defined below), have not been satisfied by
"CBCA Condition" means that the applicable Shareholder approvals shall have been obtained, and Calfrac shall have applied for the plan of arrangement giving effect to the Amended Recapitalization Transaction to be approved by the Court.
Should the Amended Recapitalization Transaction not be approved by Senior Unsecured Noteholders and Shareholders, in the absence of any transaction that is capable of receiving broad support throughout the Company's capital structure, it is likely the Company will be required by the Senior Unsecured Noteholders to proceed with a transaction under the CCAA, which will result in a reduced recovery to Shareholders as compared to the Amended Recapitalization Transaction.
In accordance with the terms of the Noteholder Support Agreement, as amended, the Company shall seek, and the Initial Consenting Noteholders shall support, the making of an order that any and all votes of Senior Unsecured Noteholders with respect to the Amended Recapitalization Transaction shall be binding to the extent the Company implements the Original Recapitalization Transaction (in the form prior to the amendments contained in the Amended Recapitalization Transaction) through the CCAA Proceedings.
Certain Canadian Federal Income Tax Considerations
Senior Unsecured Noteholders and Shareholders are urged to carefully read the summary of certain Canadian federal income tax considerations resulting from the Original Recapitalization Transaction located under the heading "Certain Canadian Federal Income Tax Considerations" in the Information Circular, as supplemented by the Material Change Report of the Company to be filed in connection with the Amended Recapitalization Transaction. Such summary addresses the tax consequences of the Shareholder Cash Election and the exercise of Warrants and the disposition of any Common Shares received on exercise thereof, and urges Senior Unsecured Noteholders and Shareholders to consult their own tax advisors for advice as to the tax considerations in respect of the Amended Recapitalization Transaction, having regard to their particular circumstances.
Issuance and Resale of Securities Received in the Amended Recapitalization Transaction –
The issuance of: (i) the Warrants issued to Shareholders pursuant to the Amended Recapitalization Transaction; and (ii) the issuance of Common Shares upon conversion of the Warrants, will be exempt from the prospectus and registration requirements under Canadian securities laws. As a consequence of these exemptions, certain protections, rights and remedies provided by Canadian securities laws, including statutory rights of rescission or damages, will not be available in respect of such new securities to be issued pursuant to the Amended Recapitalization Transaction. The Warrants issued pursuant to the Amended Recapitalization Transaction and any Common Shares issued upon conversion of the Warrants will generally be "freely tradeable" under Canadian Securities Laws in force in
Certain
Senior Unsecured Noteholders and Shareholders are urged to carefully read the summary of certain securities laws matters and tax considerations resulting from the Amended Recapitalization Transaction located under the headings "Certain
Notice is hereby given that the Court will be advised that its order approving the Arrangement, if granted, will constitute the basis for an exemption from the registration requirements of the
TSX Matters
The Common Shares are listed on the TSX. Calfrac has applied to the TSX for the listing of the Warrants and the Common Shares issuable on exercise of the Warrants, which listing would remain subject to the approval of the TSX and the satisfaction of any listing conditions required by the TSX.
Risk Factors
Senior Unsecured Noteholders and Shareholders are urged to carefully read the risk factors located under the heading "Risk Factors" in the Information Circular, as supplemented by the Material Change Report of the Company to be filed in connection with the Amended Recapitalization Transaction.
Required Approvals and Implementation
Completion of the Amended Recapitalization Transaction remains subject to, among other things, approval of the Plan of Arrangement by the requisite majorities of the Senior Unsecured Noteholders and the Shareholders at the Meetings but subject to further order of the Court, successful completion of the New 1.5 Lien Note Offering, such other approvals as may be required by the Court or the TSX, other applicable regulatory approvals, the issuance of the Final Order approving of the Plan of Arrangement by the Court, and the satisfaction or waiver of applicable conditions precedent. Upon implementation, the Plan of Arrangement would bind all Senior Unsecured Noteholders and Shareholders. The Company can give no assurances that the Amended Recapitalization Transaction will be completed.
COVID-19
Due to the current and rapidly evolving COVID-19 pandemic, the Company encourages its Senior Unsecured Noteholders and Shareholders to consider the advice and instructions of the
The Company will be providing a live webcast of the Meetings. Shareholders and Senior Unsecured Noteholders not attending the Meetings in person are encouraged to listen to the webcast. However, shareholders will not be able to vote through the webcast or otherwise participate in the Meetings. A link to the webcast will be available on the Company's website at www.calfrac.com.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The securities to be issued pursuant to the Amended Recapitalization Transaction have not been and will not be registered under the 1933 Act, or the securities laws of any state of
Calfrac's common shares are publicly traded on the
All references to "$" are to Canadian dollars, unless otherwise indicated.
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 holding of the Meetings and the completion of the proposed Amended Recapitalization Transaction, the anticipated shareholdings of the Company following the completion of the Amended Recapitalization Transaction under various scenarios, and the anticipated tax treatment of the Amended Recapitalization Transaction.
These forward-looking statements and information are based on certain key expectations and assumptions made by Calfrac in light of its experience and perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances, including, but not limited to, the following: the Amended Recapitalization Transaction will be completed as proposed; economic and political environment in which Calfrac operates; Calfrac's expectations for its customers' capital budgets and geographical areas of focus; the effect unconventional oil and gas projects have had on supply and demand fundamentals for oil and natural gas; Calfrac's existing contracts and the status of current negotiations with key customers and suppliers; the effectiveness of cost reduction measures instituted by Calfrac; and the likelihood that the current tax and regulatory regime will remain substantially unchanged.
Although Calfrac 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 Calfrac 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: Calfrac's ability to continue to manage the effect of the COVID-19 pandemic on its operations; actions taken by
The forward-looking statements and information contained in this press release are made as of the date hereof and Calfrac 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. This press release is not an offer of securities for sale in
SCHEDULE
SUMMARY OF MATERIAL TERMS OF THE WARRANTS
Issuer: | Calfrac |
Number of Warrants: | Each holder of a Common Share (on a pre-consolidation basis) at the Effective Time will receive two (2) Warrants for each pre-consolidation Common Share held. In connection with the consolidation of the Common Shares, the number of warrants will also be consolidated on the basis of one (1) Warrant (on a post-consolidation basis) for every 50 Warrants (on a pre-consolidation basis) |
Expiry Date: | Three (3) years from the issue date. |
Exercise Price: | |
Exchange Ratio: | Each whole Warrant entitles the holder thereof to one Common Share, subject to adjustment. |
Amendments: | An extraordinary resolution may be initiated by holders entitled to acquire at least 25% of the aggregate number of Common Shares which may be acquired pursuant to all the then outstanding Warrants and passed by the affirmative votes of holders entitled to acquire not less than 66⅔% of the aggregate number of Common Shares which may be acquired pursuant to all the then outstanding Warrants represented at the meeting. |
SOURCE
© Canada Newswire, source