Bonterra Energy Corp. Announces Private Placement Debt Financing, Restructuring of Its Credit Facilities to a Fully Compliant State and Subordinated Debt Conversion
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CALGARY, AB, 20 October 2021 / CNW / – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra“or the”Society“) is pleased to announce that it has successfully completed a private placement debt financing (the”Initial Offer“), improving financial flexibility and achieving its goal of restructuring all bank indebtedness into a fully compliant revolving credit facility.
The initial placement consists of a total of 32,000 units (the “Units“) of the Company, each unit consisting of one senior unsecured debenture (each a”Debenture“), with a nominal value of $ 1,000 which bears interest at the rate of 9.0% per annum and has a term of four years, and 56 common share purchase warrants (the “Mandates“) of Bonterra, each warrant exercisable to acquire one common share (“Ordinary share“) from Bonterra at the price of $ 7.75 per common share (representing a 15% premium over the 5-day volume weighted average price of the common shares on the TSX 20 October 2021), for a period of four years from 20 October 2021. Each unit was issued at a price of $ 1,000 (the “Issue price“) for gross proceeds accruing to Bonterra of $ 32 million.
The Company intends to use the net proceeds of the Initial Offering and the Follow-up Offering (as defined herein) primarily to repay existing bank indebtedness and for general corporate purposes.
Amended and Restated Credit Agreement (the “Facility”)
Concurrent with the closing of the initial placement, Bonterra and its syndicate of lenders agreed to modify the facility. The changes include the following:
Reflecting the Company’s continued strategy of focusing on the repayment of outstanding bank debt, Bonterra has agreed with its lenders to a fully compliant debt base. $ 220 million, composed of a $ 195 million revolving syndicated loan and a $ 25 million non-union revolving facility;
This represents an elimination of the non-revolving term loan of $ 65 million, leading to better financial flexibility; and
The installation has $ 10 million cuts to December 31, 2021 and March 31, 2022 and turn to May 31, 2022 with a due date of November 30, 2022.
The Company is pleased to have successfully transferred its bank indebtedness to a fully compliant facility. With this improved flexibility and liquidity, Bonterra is confident that it has established a more solid position from which to execute its business plan through the remainder of 2021 and 2022. In order to benefit from a material price environment Solid firsts, Bonterra intends to continue investing capital to support the generation of free cash flow that can be allocated to additional growth initiatives while maintaining balance sheet strength.
Subordinated debt conversion
Bonterra has also entered into agreements with the holders of its existing subordinated promissory note and its related party loan (the “Subordinated debt“) to convert their principal amounts to a total of $ 19.5 million in units under the same terms and conditions as the subscribers for the initial investment.
Initial offer details
Paradigm Capital Inc. and Peters & Co. Limited (collectively, the “Agents“) and Bonterra entered into an agency agreement dated 20 October 2021, pursuant to which the Agents acted as co-lead agent for the initial offering, which was effected by way of private placement exemptions from the prospectus requirements under NI 45-106 – Prospectus exemptions (“Regulation 45-106“) in some provinces of Canada. The securities issued as part of the initial offering are subject to applicable regulatory holding periods.
As part of the Initial Offer, the current CEO of Bonterra, Georges fink, subscribed for 7,000 shares.
Follow the offer
Concurrent with the closing of the initial offering, the Company has entered into an agreement with the Agents providing for a separate offering of up to $ 5 million of units (the “Follow the offer“), on a” best efforts “basis, on the same terms and conditions as the original offering. Units issuable under the follow-on placement will be offered by way of private placement exemptions from the prospectus requirements under of Regulation 45-106 in each of the provinces of Canada and in United States under exemptions from the registration requirements of United States Securities Act of 1933, as amended, and in accordance with applicable laws and subject to applicable regulatory hold periods. Within the framework of the Follow-up Offer, insiders of the Company will be able to subscribe up to $ 1 million in Units.
Overview of Debentures
The debentures have a term of four years and bear interest at the rate of 9.0% per annum, payable semi-annually in arrears on June 30th and the 31st of December of each year, starting December 31, 2021. Interest is calculated on the basis of a 360-day year consisting of twelve 30-day months. The December 31, 2021 the interest payment will represent the accrued interest for the period from, and including, 20 october, 2021 to, but excluding, December 31, 2021. The Debentures are direct senior unsecured obligations of the Company and are subordinated to all existing and future senior secured indebtedness of the Company. The Debentures are subject to the terms and conditions of a Debenture Indenture between the Company and Odyssey Trust Company dated 20 October 2021.
Overview of warrants
Each warrant may be exercised to acquire one common share at an exercise price of $ 7.75, subject to the usual anti-dilution adjustment, up to 20 October 2025. The Warrants are subject to the terms and conditions of a Warrants Deed between the Company and Odyssey Trust Company dated 20 October 2021.
Peters & Co. Limited acted as financial advisor to Bonterra in connection with the aforementioned series of transactions.
Bonterra Energy Corp. is a conventional oil and gas company with operations in Alberta, Saskatchewan and British Columbia, focused on its strategy of sustainable and long-term growth and value creation for its shareholders. The Company’s shares are listed on the Toronto Stock Exchange under the symbol “BNE”.
Certain statements in this release include statements that contain words such as “anticipate”, “may”, “should”, “expect”, “seek”, “may”, “intend”, “Probably”, “will”, “” believe “and similar expressions, relating to matters which are not historical facts, and these statements of our beliefs, intentions and expectations concerning the development, the results and the events which take place. occur or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analyzes that we have made based on our experience and perceptions. contained in this press release include, but are not limited to: the use of the net proceeds of the initial offering and the follow-on offering; the expected benefits of the Facility; odalities and expected closing date of the follow-up offer; and other related matters.
All of this forward-looking information is based on certain assumptions and analyzes that we have made in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors that we deem appropriate in the future. circumstances. Risks, uncertainties and assumptions are difficult to predict and may affect operations, and may include, but are not limited to: that the actual use of the net proceeds of the Initial Offer and the Follow-up Offer may differ from those indicated; the inability of the Company to take advantage of the benefits associated with the Facility; currency fluctuations; equipment and labor shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, tax and other laws and regulations, as well as the manner in which such laws and regulations are interpreted and applied; the ability of oil and gas companies to raise capital or maintain the facility; the effect of weather conditions on operations and facilities; the existence of operational risks; volatility in oil and natural gas prices; supply and demand for oil and gas products; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; volatility of stock markets; opportunities available or sought by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking information and, therefore, no assurance can be given that any of the events anticipated by the forward-looking information will or will occur, or if any of them does, what will be the benefits. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained in this document is expressly qualified by this cautionary statement.
The presentation currency and the functional currency of the Company are the Canadian dollar.
The TSX accepts no responsibility for the accuracy of this release.
SOURCE Bonterra Energy Corp.
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