Cardinal Energy Ltd. Announces Extension of Credit Facility Redetermination Date and Debentureholder Meeting
May 25 2020 - 7:00AM
Cardinal Energy Ltd. ("
Cardinal" or the
"
Company") (TSX: CJ) has received approval to
extend the revolving period under the Company's $325 million
reserves-based credit facility (the "
Credit
Facility") and intends to call a meeting of the holders of
its 5.50% extendible convertible unsecured subordinated debentures
due December 31, 2020 (the "
Debentures") to amend
the Debentures with the addition of an exchange right.
Credit Facility
The Company's $325 million Credit Facility was
available on a revolving basis until May 23, 2020. On May 22, 2020,
subject to certain conditions, the Company signed an extension
until June 30, 2020 in order for the syndicate to have more time to
assess current market conditions and the effect of potential
government assistance programs on the Credit Facility. Among
others, the conditions include a cap on the drawings available to
the Company under the Credit Facility and that no drawings can be
used to redeem or repay the Debentures. The Company anticipates
that the draw cap and some of the other conditions will only be in
place on an interim basis until a longer term extension and terms
are finalized.
Debentureholder Meeting
Cardinal intends to seek the approval of holders
(the "Debentureholders") of Debentures to make
various amendments (the "Amendments") to the
indenture (the "Indenture") governing the
Debentures with the addition of an exchange right (the
"Exchange Right"). The Exchange Right will provide
Debentureholders the right, but not the obligation, to exchange
their Debentures for a new second series of 8.00% convertible
unsecured subordinated debentures (the "Extended
Debentures").
The Extended Debentures will be similar in all
material ways to the Debentures except that, the Extended
Debentures:
- will have a maturity date of December 31, 2022, compared to
December 31, 2020, for the existing Debentures;
- will bear interest at the rate of 8.00% per annum, payable in
equal instalments semi-annually in arrears on June 30 and December
31 in each year, compared to 5.50% for the existing
Debentures;
- will be convertible into common shares (the "Common
Shares") of Cardinal at a conversion price (as defined in
the Indenture) of $1.25 per share, compared to $10.50 per share for
the existing Debentures;
- will not be redeemable by the Company prior to December 31,
2020; and
- as a consequence of the reduction in the Conversion Price, the
number of additional Common Shares per $1,000 principal amount of
Extended Debentures constituting the relevant make-whole premium
which is payable in connection with a Change of Control (as defined
in the Indenture) in certain circumstances will be amended.
The meeting (the "Meeting") to
consider the proposed Amendments will be held at the office of
Burnet, Duckworth & Palmer LLP in Calgary, Alberta on June 19,
2020, at 9:00 a.m. (Calgary time).
A proxy form and a management information
circular in connection with the Meeting is expected to be mailed to
Debentureholders and filed on SEDAR shortly.
Note Regarding Forward-Looking
Statements
This press release contains forward-looking
statements and forward-looking information (collectively
"forward-looking statements") within the meaning
of applicable securities laws relating to Cardinal's plans and
other aspects of Cardinal's anticipated future operations,
management focus, objectives, strategies, financial, operating and
production results. Forward looking information typically uses
words such as "anticipate", "believe", "project", "expect", "goal",
"plan", "intend", "may", "would", "could" or "will" or similar
words suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, and without limiting the
generality of the foregoing, all statements included in this press
release that address activities, events or developments that
Cardinal expects or anticipates will or may occur in the future,
including, but not limited to statements with respect to the
renewal of the Credit Facility, if any and the terms and conditions
of such renewal, plans to hold a Meeting and the timing of the
Meeting and availability of meeting materials, all constitute
forward-looking statements under applicable Canadian securities
laws and necessarily involve known and unknown risks and
uncertainties, most of which are beyond Cardinal's control.
Forward-looking statements regarding Cardinal
are based on certain key expectations and assumptions of Cardinal
concerning various matters including that the Credit Facility will
be renewed and on the terms expected.
These forward-looking statements are subject to
numerous risks and uncertainties, certain of which are beyond
Cardinal's control. Such risks and uncertainties include, without
limitation: the risk that the Credit Facility will not be renewed
following the extension period, the terms of any such renewal,
including, as to whether a renewed Credit Facility will permit the
Company to draw on the Credit Facility in order to repay all or any
portion of the Debentures on their maturity date.
Management has included the forward-looking
statements above and a summary of assumptions and risks related to
forward-looking statements provided in this press release in order
to provide readers with a more complete perspective on Cardinal's
future operations and such information may not be appropriate for
other purposes. Cardinal's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits that Cardinal will derive there from.
Readers are cautioned that the foregoing lists of factors are not
exhaustive. These forward-looking statements are made as of the
date of this press release and Cardinal disclaims any intent or
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or results or
otherwise, other than as required by applicable securities
laws.
About Cardinal Energy Ltd.
One of Cardinal's goals is to continually
improve our Environmental, Safety and Governance mandate and
operate our assets in a responsible and environmentally sensitive
manner. As part of this mandate, Cardinal injects and
conserves more carbon than it emits making us one of the few
Canadian energy companies to have a negative carbon footprint.
Cardinal is a Canadian oil focused company with
operations focused on low decline light, medium and heavy quality
oil in Western Canada.
For further information: M.
Scott Ratushny, CEO or Shawn Van Spankeren, CFO or Laurence Broos,
VP Finance Email: info@cardinalenergy.caPhone: (403) 234-8681
Website: www.cardinalenergy.ca
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