CALGARY, AB, Jan. 22, 2021 /CNW/ - (TSX: PMT) – Perpetual
Energy Inc. ("Perpetual" or the "Company") announced today that it
has completed its previously announced arrangement involving the
exchange of its 8.75% senior unsecured notes due January 23, 2022 (the "Old Notes") for new 8.75%
secured third-lien notes due January 23,
2025 (the "New Notes") pursuant to a Court-approved plan of
arrangement (the "Note Exchange Arrangement").
The New Notes have been issued under a new trust indenture that
contains substantially the same terms as the Old Notes other than
the New Notes are secured on a third-lien basis subordinate to the
Company's senior indebtedness and allow for semi-annual interest
payments to be paid either in cash, in additional New Notes (a "PIK
Interest Payment"), or a combination thereof, at the Company's
election. The Company has elected to make a PIK Interest Payment on
the New Notes for the January 23,
2021 interest payment. Holders of New Notes will receive
$43.75 per $1,000 principal amount of New Notes in a PIK
Interest Payment, representing all accrued and unpaid interest
outstanding from July 23, 2020 up to,
but excluding, January 23, 2021,
being the first interest payment of the New Notes, which, for
greater certainty, such amount includes all accrued and unpaid
interest on the Notes.
The Note Exchange Arrangement is designed to strengthen the
Company's overall financial position and maximize value for all
stakeholders including noteholders and shareholders. In addition to
providing the noteholders with security over the Company's assets,
it is also anticipated to provide noteholders with greater
certainty that the Company will continue to make regular
semi-annual interest payments on the Notes and will be able to
repay the New Notes when due. The Note Exchange Arrangement has not
resulted in any dilution to the Company's shareholders as no shares
were issued in connection with the Note Exchange Arrangement and
shareholders continue to own the same number of shares, nor will
the security granted under the New Notes negatively affect
shareholders.
At a special meeting of noteholders and a special meeting of
shareholders held today, the Note Exchange Arrangement was
overwhelmingly approved by 99.85% of votes cast by noteholders and
99.77% of votes cast by shareholders. Following the meetings,
Perpetual obtained the final order of the Court approving the Note
Exchange Arrangement.
ADDITIONAL INFORMATION
About Perpetual
Perpetual is an oil and natural gas exploration, production and
marketing company headquartered in Calgary, Alberta. Perpetual owns a diversified
asset portfolio, including liquids-rich natural gas assets in the
deep basin of west central Alberta, heavy oil and shallow natural gas in
eastern Alberta, with longer term
opportunities through undeveloped oil sands leases in northern
Alberta. Additional information on
Perpetual can be accessed at www.sedar.com or from the
Corporation's website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
Forward-Looking Information
Certain information regarding Perpetual in this news release
may constitute forward-looking information or statements under
applicable securities laws. The forward looking information
includes, without limitation, information regarding the Company's
beliefs and expectations regarding the expected benefits of the
exchange of the Old Notes for the New Notes for the Company and its
stakeholders, including noteholders and shareholders. Users of
forward-looking information are cautioned that actual results may
vary from the forward-looking information disclosed in this news
release. The material risk factors that could cause actual results
to differ materially from the forward-looking information contained
in this press release include: the risk that no market may develop
for trading the New Notes or such market may lack liquidity; the
trustee under the indenture to govern the New Notes may fail to
efficiently administer the New Notes or effectively act on behalf
of the holders thereof; and other risks and uncertainties described
under the heading "Risk Factors" and elsewhere in the Company's
most recent Annual Information Form and other documents filed with
Canadian securities regulators at www.sedar.com. In particular and
without limitation of the foregoing, the COVID-19 pandemic has had
a negative impact on global financial conditions. Perpetual cannot
accurately predict the impact COVID-19 will have on its ability to
execute its business plans in response to government public health
efforts to contain COVID-19 and to obtain financing or third
parties' ability to meet their contractual obligations with
Perpetual including due to uncertainties relating to the ultimate
geographic spread of the virus, the severity of the disease, the
duration of the outbreak, and the length of travel and quarantine
restrictions imposed by governments of affected jurisdictions; and
the current and future demand for oil and gas. In the event that
the prevalence of COVID-19 continues to increase (or fears in
respect of COVID-19 continue to increase), governments may increase
regulations and restrictions regarding the flow of labour or
products, and travel bans, and Perpetual's operations, service
providers and customers, and ability to advance its business plan
or carry out its top strategic priorities, could be adversely
affected. In particular, should any employees, consultants or other
service providers of Perpetual become infected with COVID-19 or
similar pathogens, it could have a material negative impact on
Perpetual's operations, prospects, business, financial condition
and results of operations. Undue reliance should not be placed on
forward-looking information, which is not a guarantee of
performance and is subject to a number of risks or uncertainties,
including without limitation those described herein and under "Risk
Factors" in Perpetual's Annual Information Form and MD&A for
the year ended December 31, 2019 and
in other reports on file with Canadian securities regulatory
authorities which may be accessed through the SEDAR website
(www.sedar.com) and at Perpetual's website
(www.perpetualenergyinc.com). Readers are cautioned
that the foregoing list of risk factors is not exhaustive.
Forward-looking information is based on the estimates and opinions
of Perpetual's management at the time the information is released,
and Perpetual disclaims any intent or obligation to update publicly
any such forward-looking information, whether as a result of new
information, future events or otherwise, other than as expressly
required by applicable securities law.
SOURCE Perpetual Energy Inc.