Ensign Energy Services Inc. (TSX:ESI) announced a non-brokered private placement of unsecured, subordinated convertible debentures for gross proceeds of CAD 25.95 million on March 29, 2018. The company received CAD 25,950,000 in the first tranche closing. The debentures bear interest from the date of closing at 7.0% per annum, payable semi-annually in arrears, on April 1 and October 1 of each year, with the first payment of interest due on October 1, 2018.

The debentures will mature on January 31, 2022. The corporation may complete an additional closing of the transaction for up to CAD 10 million in order to accommodate additional subscribers. The debentures are convertible at the option of the holder into common shares at any time prior to the close of business on the maturity date upon at least 61 days prior notice, at a conversion price of CAD 7.00 per common share, subject to customary anti-dilution adjustments.

Holders converting their debentures will receive accrued and unpaid interest thereon (if any), up to, but excluding, the date of conversion. If, on and after April 1, 2021, the closing price of the common shares on the Toronto Stock Exchange exceeds 125% of the conversion price for at least 30 consecutive trading days, the debentures may be redeemed by the corporation for cash, in whole or in part from time to time, on not more than 90 days and not less than 60 days prior notice, at a redemption price equal to the outstanding principal amount of the debentures plus accrued and unpaid interest thereon (if any), up to, but excluding, the date of redemption. The transaction included participation from N. Murray Edwards, Barth Whitham, James Howe, Cary Moomjian and Robert Geddes, all directors of the corporation for CAD 20,000,000, CAD 5,000,000, CAD 500,000, CAD 250,000 and CAD 200,000 of the debentures, respectively.

The transaction, including the subscription of the holders, was unanimously approved on March 27, 2018 by the board of directors of the corporation.