EDMONTON, AB, March 22, 2022 /CNW/ - Alberta Investment Management Corporation ("AIMCo") announces today that it is ceasing to file reports in accordance with the alternative monthly reporting system under Part 4 of National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues ("NI 62-103") in respect of Western Energy Services Corp. ("Western") as a result of entering into a debt restructuring agreement with Western (the "Debt Restructuring Agreement").
As disclosed in Western's press release dated March 22, 2022 and filed on SEDAR (www.sedar.com), Western has entered into certain agreements, including the Debt Restructuring Agreement, to effect a comprehensive recapitalization to restructure a portion of its outstanding debt and raise new capital (collectively, the "Restructuring Transaction"). The Restructuring Transaction is intended to provide Western with a more sustainable capital structure.
Pursuant to the Debt Restructuring Agreement, AIMCo has agreed, subject to the satisfaction of certain conditions, to convert $100,000,000 of principal amount of indebtedness outstanding under the second lien credit agreement dated October 17, 2017, as amended between AIMCo and Western into approximately 2,000,000,000 Common Shares at a conversion price (the "Conversion Price") of $0.05 per share, subject to adjustments as set forth below (the "Debt Conversion").
As one of the conditions to completion of the Debt Conversion, Western will conduct a rights offering of Common Shares to eligible shareholders to raise proceeds of $31,500,000 (the "Rights Offering") at a subscription price of $0.016 per share, subject to adjustment depending on the market price of the Common Shares at the commencement of the Rights Offering.
Both immediately before and after the execution of the Debt Restructuring Agreement, AIMCo had ownership, control or direction over 17,600,000 Common Shares, representing approximately 19.18% of the outstanding Common Shares. Following the completion of the Debt Conversion, AIMCo is expected to own approximately 2,017,600,000 Common Shares, representing approximately 49.69% of the Common Shares (assuming that the price of the Rights Offering is $0.016 per share and that AIMCo does not participate in the Rights Offering). The number of Common Shares ultimately acquired by AIMCo will depend on the final Conversion Price, which will be reduced below $0.05 if the subscription price under the Rights Offering is less than $0.016. In such a case, the Conversion Price will be calculated as $0.05 multiplied by a fraction, the numerator of which is the subscription price under the Rights Offering and the denominator of which is $0.016.
Since AIMCo is expected to own in excess of 30% of the Common Shares following the completion of the Debt Conversion, it is anticipated to result in AIMCo being deemed to possess effective control over Western, disqualifying AIMCo from using the alternative monthly reporting system under Section 4.2(1)(b) of NI 62-103. As a result, AIMCo is ceasing to file alternative monthly reports in respect of Western under Part 4 of NI 62-103.
As a condition precedent to the Debt Conversion, the board of directors of Western will appoint two persons designated by AIMCo to be directors of Western, and AIMCo will enter into an investor rights agreement (the "Investor Rights Agreement") with Western, G2S2 Capital Inc. ("G2S2"), Armco Alberta Inc. ("Armco"), Matco Investments Ltd. ("Matco") and Ronald P. Mathison ("Mathison"). Pursuant to the Investor Rights Agreement, Western will grant AIMCo the right to nominate two directors for election to the board of Western as long as AIMCo, together with any entities controlled, directly or indirectly by AIMCo, holds 30% or more of the outstanding Common Shares, and under which G2S2, Armco, Matco and Mathison (or any affiliate holding Common Shares) will agree not to vote against the election of an AIMCo nominee to serve as a director, or in favour of any proposal or resolution to remove any AIMCo nominee as a director, while AIMCo holds such nomination rights.
Also as a condition to the completion of the Debt Conversion, AIMCo will enter into a registration rights agreement with Western pursuant to which AIMCo will be provided with rights to cause Western to file a prospectus to facilitate the sale of its Common Shares in a public offering, or to allow AIMCo to participate in a public offering of Common Shares by Western, in each case subject to certain customary restrictions and limitations.
The Debt Conversion will require shareholder approval under the rules of the Toronto Stock Exchange. Shareholders representing a majority of the Common Shares have executed a written consent approving the Debt Conversion and have otherwise agreed to vote their Common Shares in a manner to approve the Restructuring Transaction to the extent required. These shareholders include G2S2, Matco, Ronald Mathison and all of the other directors and senior executive officers of Western.
This press release is being issued pursuant to NI 62-103 which requires a report to be filed under Western's profile on SEDAR (www.sedar.com) containing additional information respecting the foregoing matters. Reference is also made to the full text of Western's press release dated March 22, 2022 for further information on the Restructuring Transaction and also to the Debt Restructuring Agreement, a copy of which will be filed by Western on SEDAR.
ABOUT ALBERTA INVESTMENT MANAGEMENT CORPORATION
AIMCo is one of Canada's largest and most diversified institutional investment managers with $168.3 billion of assets under management. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 32 pension, endowment and government funds in the Province of Alberta.
For more information on AIMCo please visit www.aimco.ca or follow us on LinkedIn.
SOURCE Alberta Investment Management Corporation
Media Contact, Dénes Németh, Vice President, Corporate Communications & Public Affairs, M: 780-932-4013, O: 780-392-3857, E: [email protected]
Share this article