Stoneway Obtains Interim Order and Announces Meeting Details in Connection with Restructuring Transaction

TORONTO, Oct. 8, 2020 /CNW/ - Stoneway Capital Corporation ("Stoneway" and, together with its subsidiary and parent entities, the "Company") announced today that the Ontario Superior Court of Justice (Commercial List) (the "Court") has issued an interim order (the "Interim Order") authorizing, among other things, the holding of a meeting (the "Noteholders' Meeting") of holders of the Company's outstanding 10.000% senior secured notes due 2027 (the "Existing Notes") to consider and vote upon a corporate plan of arrangement (the "Plan of Arrangement") under the Canada Business Corporations Act (the "CBCA") to implement the previously announced proposed restructuring transaction (the "Transaction").

As previously announced in its September 22, 2020 news release (the "Restructuring Announcement"), the Company and certain interested parties entered into a restructuring support agreement (the "Restructuring Support Agreement") with an ad hoc group of noteholders holding a substantial majority of the Existing Notes, setting out the terms of a Transaction that will result in the restructuring of the Company's debt obligations under the Existing Notes. Under the terms and conditions of the Support Agreement, the Transaction will, among other things, result in the exchange of the Existing Notes, including all accrued and unpaid interest thereon, for new senior secured notes issued by Stoneway in a principal amount equal to 100% of the principal amount of the Existing Notes.  Additional key terms of the Transaction were announced and set out in the Restructuring Announcement.

To date, the proposed Transaction has the support of holders of approximately 85% of the Existing Notes that have agreed to vote in favour of the Plan of Arrangement pursuant to the Restructuring Support Agreement.

The Meeting and Voting

The Noteholders' Meeting in respect of the Plan of Arrangement is scheduled to be held on November 13, 2020, at the offices of Bennett Jones LLP at Suite 3400 One First Canadian Place, Toronto, Ontario or by an electronic communications medium.  Pursuant to the Interim Order, the Noteholders' Meeting is scheduled to begin at 10:00 a.m. (Toronto time).

The record date (the "Record Date") for voting at the Noteholders' Meeting is 5:00 p.m. (Toronto time) on October 8, 2020. 

Holders of the Existing Notes (the "Noteholders") as at the Record Date will each be entitled to vote on the Plan of Arrangement at the Noteholders' Meeting based on one vote per US$1,000 of principal amount of the Existing Notes held by the applicable Noteholder as at the Record Date. 

To be approved at the Noteholders' Meeting, the Plan of Arrangement requires the affirmative vote of at least 66⅔% of the votes cast.  As noted above, subject to certain terms and conditions, approximately 85% of the Noteholders have agreed to vote in favour of the Plan of Arrangement pursuant to the Restructuring Support Agreement entered into with the Company.

The deadline for the Noteholders to submit their proxies or voting instructions in order to vote on the Plan of Arrangement and other items to be considered at the Noteholders' Meeting is 5:00 p.m. (Toronto time) on November 11, 2020 (the "Voting Deadline").

Banks, brokers or other intermediaries (each, an "Intermediary") that hold the Existing Notes on a Noteholder's behalf may have internal deadlines that require Noteholders to submit their votes by an earlier date in advance of the Voting Deadline, as applicable, and may have internal requirements for the submission of voting instructions.  Noteholders are encouraged to contact their Intermediaries directly to confirm any such internal deadline or voting instruction requirements.

Information Circular

The management information circular for the Noteholders' Meeting (the "Circular") will contain, among other things, information regarding procedures for voting on the Plan of Arrangement and the Interim Order, as well as other background and material information regarding the Transaction.  The Company expects the mailing of the Circular to begin on or about October 20, 2020.  The Circular, the forms of proxy and the voting information form will also be available as follows:

• on Stoneway's website through the Investors section at https://www.stonewaycap.com/investor-relations/; and/or
  
  
• through Kingsdale Advisors by calling toll free at 1-888-327-0825 or 416-867-2272 or by email at [email protected] or on Kingsdale Advisors' website at www.KingsdaleAdvisors.com.

Any questions or requests for further information regarding voting at the Noteholders' Meeting should be directed to Kingsdale Advisors at 1-888-327-0825 or 416-867-2272, or by email at [email protected]. 

Court Approval and Implementation

If the Plan of Arrangement is approved by the affirmative vote of at least 66⅔% of the votes cast at the Noteholders' Meeting, the Company and its affiliate, 12386399 Canada Limited ("Stoneway Arrangeco"), will attend a hearing before the Court, to be scheduled in November 2020, to seek a court order approving the Plan of Arrangement (the "Final Order").

The Interim Order provides for a stay of proceedings in favour of the Company and certain of its affiliates in respect of any defaults resulting from their commencement of or involvement in the proceedings under the CBCA (the "CBCA Proceedings"), the steps contemplated by or related to the CBCA Proceedings or the proposed Transaction, the non-payment of any amounts due and payable in respect of the Existing Notes or any defaults or any cross-defaults relating to the foregoing, subject to the terms of the Interim Order.

Completion of the Transaction will be subject to, among other things, approval of the Plan of Arrangement by the requisite majority of the Noteholders at the Noteholders' Meeting to be held on November 13, 2020, such other approvals as may be required by the Court and any other applicable approvals, the issuance of the Final Order approving of the Plan of Arrangement by the Court and the satisfaction or waiver of applicable conditions precedent.  Subject to the receipt of all requisite approvals and the satisfaction or waiver of the other conditions to completion of the Transaction, the Company is working towards completing the Transaction by the end of December 2020, provided that the Transaction may be implemented by the end of November 2020 if certain conditions to implementation are waived pursuant to the Restructuring Support Agreement. Upon implementation, the Plan of Arrangement would bind all the Noteholders and such other persons contemplated by the Plan of Arrangement.

Additional information in connection with the implementation of the Transaction and the CBCA Proceedings will be made available on the Company's website at https://www.stonewaycap.com/investor-relations/ in the Investors section.

About Stoneway

Stoneway Group's principal business is the construction, ownership and operation of power generation facilities located in Argentina. 

FORWARD LOOKING STATEMENTS: Certain information contained in this press release may contain forward looking statements within the meaning of applicable securities laws. The use of any of the words "continue", "plan", "propose", "would", "will", "believe", "expect", "position", "anticipate", "improve", "enhance" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this document contains forward-looking statements concerning: key terms of the Transaction and the effect of its implementation on the Noteholders and the Company; stakeholder support for the Transaction; the expected process and timing for implementing the Transaction; the holding and timing of, and matters to be considered at, the Noteholders' Meeting as well as with respect to voting at the Noteholders' Meeting; the deadlines for submitting proxies and voting instructions; the scheduling of the Noteholders' Meeting; the matters to be considered at and voted on the Noteholders' Meeting; the relief to be sought in the CBCA Proceedings in respect of the Plan of Arrangement; the completion of the Transaction, including with respect to obtaining any necessary approvals and satisfying any conditions and the expected timing thereof; the public posting of materials and information related to the Transaction; and the effect of the Transaction.

Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of the Company to implement the Transaction on the terms described in this press release and the Restructuring Announcement; the ability of Stoneway to receive all necessary court, third party and stakeholder approvals in order to complete the Transaction; the matters to be considered and voted on at the Noteholders' Meeting; the ability of the Company to operate in the ordinary course during the CBCA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Company to continue as a going concern; the ability of the Company to continue to realize its assets and discharge its liabilities and commitments; the Company's future liquidity position and access to capital to fund ongoing operations and obligations (including debt obligations); and the ability of the Company to stabilize its business and financial condition.

Although the Company bases its forward-looking statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this news release.  Other unknown or unpredictable factors also could harm the Company's future results. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as at the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

SOURCE Stoneway Capital Corporation

David Mack, Director, [phone] (x06), 410 Park Avenue, Suite 900, New York, NY 10022; Juan I. Sánchez Alcázar, Chief Restructuring Officer, Av. Del Libertador 498, 15th floor, Buenos Aires (C1001ABR), Argentina