Stoneway Obtains Interim Order in Connection with Restructuring Transaction

TORONTO, March 24, 2022 /CNW/ - Stoneway Capital Corporation ("SCC"), Stoneway Power Generation Inc. ("Stoneway Power") and 12386399 Canada Limited ("ArrangeCo" and together with SCC and Stoneway Power, the "Applicants") announced today that the Ontario Superior Court of Justice (Commercial List) (the "Court") has issued an interim order (the "Interim Order") pursuant to section 192 of the Canada Business Corporation Act (the "CBCA"), which, among other things:

Exhibit A (CNW Group/Stoneway Capital Corporation)

i.	declares that, for the purposes of considering and voting on the Applicants' amended and restated plan of arrangement pursuant to the CBCA (the "CBCA Plan of Arrangement" and the proceedings commenced in connection therewith, the "CBCA Proceedings"), certain of the votes cast in respect of the Second Amended Joint Plan Under Chapter 11 of the Bankruptcy Code (as amended, the "Chapter 11 Plan") submitted by certain of the Applicants and certain of their affiliates (collectively, the "Chapter 11 Debtors") in proceedings (the "Chapter 11 Proceedings") commenced under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the "US Court") shall constitute votes cast in the same amount (whether accepting or rejecting the Chapter 11 Plan) for a resolution (the "Arrangement Resolution") authorizing, adopting and approving  the Applicants' proposed arrangement under the CBCA pursuant to the CBCA Plan of Arrangement; and
ii.	authorizes and directs the distribution of voting and solicitation materials to parties entitled to vote on the CBCA Plan of Arrangement (the "Solicitation Packages"), which will be comprised of, among other things:
	a.	the Disclosure Statement for Debtors' Second Amended Joint Plan Under Chapter 11 of the Bankruptcy Code (the "Disclosure Statement") and each of its exhibits, including the CBCA Plan of Arrangement, the Arrangement Resolution and the Chapter 11 Plan;
	b.	ballots used for voting on the Chapter 11 Plan and the CBCA Plan of Arrangement; and
	c.	an order entered by the US Court on March 21, 2022, approving the adequacy of the Disclosure Statement and the procedures for soliciting votes on the Chapter 11 Plan and CBCA Plan of Arrangement (the "Solicitation and Voting Procedures").

The primary purpose of the CBCA Plan of Arrangement and the Chapter 11 Plan is to implement one or more sale transactions (the "Sale Transactions"), pursuant to which a newly formed entity, which will be an affiliate of MSU Energy Holding Ltd. ("SCC UK") and, as directed by SCC UK, one or more of SCC UK's subsidiaries (collectively, the "Buyer"), will acquire the business enterprise of the Applicants and their subsidiaries and affiliates (collectively, the "Stoneway Group"), including substantially all of the assets of SCC and certain partnership interests of Stoneway Energy International LP and Stoneway Energy LP. If consummated, the Chapter 11 Plan and the CBCA Plan of Arrangement will result in, among other things (collectively, the "Restructuring Transaction"):

i.	the consummation of the Sale Transactions, with the transfer of all assets subject to the Sale Transactions free and clear of all claims and liens to the Buyer;
ii.	each holder of an allowed claim (a "Senior Notes Claim") in respect of SCC's 10.000% senior secured notes due 2027 in the outstanding principal amount of approximately US$588.98 million (the "Senior Notes") receiving a pro rata distribution of: (i) US$300 million aggregate principal amount of first-lien secured notes (the "New First Lien Notes"); and (ii) US$162.5 million aggregate principal amount of second-lien secured notes, each to be issued by SCC UK, in full and complete satisfaction of such allowed Senior Notes Claim;
iii.	each holder of an allowed claim (a "Term Loan Claim") in respect of the secured term credit facility in the outstanding principal amount of approximately US$217.61 million under which GRM Energy Investment Limited is the borrower and Stoneway Capital Ltd, Stoneway Group LP and Stoneway Power are the guarantors (the "Term Loan"), receiving a pro rata share of: (i) US$10 million aggregate principal amount of the New First Lien Notes; and (ii) non-convertible preferred equity of SCC UK, in full and complete satisfaction of such allowed Term Loan Claim;
iv.	the satisfaction of all outstanding principal and interest under a US$16.5 million super-priority secured debtor-in-possession financing facility provided to the Chapter 11 Debtors in the Chapter 11 Proceedings (the "DIP Facility") through: (i) the distribution to holders of claims in respect of the DIP Facility of super-priority first-lien secured notes to be issued by SCC UK (the "New Super-Priority First Lien Notes"); and (ii) any accrued interest on the DIP Facility that results in the principal (after payment in kind interest) exceeding US$16.5 million being paid in full in cash;
v.	each holder of an allowed claim (a "Promissory Note Claim") in respect of certain promissory notes  in the aggregate principal amount of approximately US$1.36 million (the "Promissory Notes") receiving New Super-Priority First Lien Notes in an amount equal to the aggregate principal amount of its allowed Promissory Note Claim;
vi.	the cancellation and discharge of the DIP Facility, the Senior Notes, the Term Loan and the Promissory Notes; and
vii.	the amalgamation of SCC, Stoneway Power and ArrangeCo.

Voting on the CBCA Plan Arrangement

The Interim Order directs the Applicants to employ the Solicitation and Voting Procedures approved in the Chapter 11 Proceedings in lieu of convening a meeting of holders of Senior Notes Claims and Term Loan Claims in respect of the CBCA Plan of Arrangement, and to solicit votes from such holders using the Solicitation Packages distributed in connection with the Chapter 11 Plan. Votes cast by holders of Senior Notes Claims and Term Loan Claims on the Chapter 11 Plan shall constitute votes cast in the same amount (whether accepting or rejecting the Chapter 11 Plan) for the Arrangement Resolution approving the CBCA Plan of Arrangement.  Pursuant to the Solicitation and Voting Procedures, the deadline for holders of Senior Notes Claims and Term Loan Claims to cast votes on the Chapter 11 Plan is April 25, 2022, at 4:00 p.m. (prevailing Eastern Time). A summary of the Solicitation and Voting Procedures is set forth in the Notice of Hearing to Consider Confirmation of the Debtors' Second Amended Joint Plan Under Chapter 11 of the Bankruptcy Code and Relating Voting and Objection Deadlines, attached as Exhibit A.

Additional details in respect of voting on the Chapter 11 Plan and the CBCA Plan of Arrangement are contained in the Disclosure Statement, the Voting and Solicitation Procedures and the Interim Order, each of which are available on the website of Prime Clerk LLC, the notice and claims agent appointed in the Chapter 11 Proceedings - https://cases.primeclerk.com/StonewayCapital (the "Prime Clerk Website").

Court Approval and Implementation

If the CBCA Plan of Arrangement is approved by the affirmative vote of at least 66⅔% of the votes cast by holders of Senior Notes Claims and the holders of claims that relate to or are in respect of any guarantee of the Term Loan provided by SCC and Stoneway Power and the Chapter 11 Plan is approved by the requisite majority of creditors entitled to vote on the Chapter 11 Plan, the Applicants will attend a hearing before the Court currently scheduled for May 3, 2022, to seek an order approving the CBCA Plan of Arrangement (the "Final Order").

In connection with Court approval of the CBCA Plan of Arrangement, the Applicants expect to seek approval of, among other things: (i) the release of certain claims as provided for in CBCA Plan of Arrangement and the Chapter 11 Plan; and (ii) the discharge of certain guarantees and, if applicable, certain security interests conveyed in respect of the Senior Notes by the Stoneway Group's operating subsidiaries in Argentina.

Completion of the Restructuring Transaction will be subject to, among other things, approval of each of the CBCA Plan of Arrangement and the Chapter 11 Plan by the requisite majority of creditors entitled to vote on such plans, such other approvals as may be required by the Court and the US Court, and any other applicable approvals, the issuance of the Final Order approving the CBCA Plan of Arrangement by the Court, and the satisfaction or waiver of applicable conditions precedent to the Restructuring Transaction. Subject to the receipt of all requisite approvals and the satisfaction or waiver of the other conditions to completion of the Restructuring Transaction, the Stoneway Group is working towards completing the Restructuring Transaction in May 2022.

Additional information in connection with the implementation of the Restructuring Transaction, the CBCA Proceedings and the Chapter 11 Proceedings will be made available on the Prime Clerk Website.

About Stoneway

The 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 Restructuring Transaction and the effect of its implementation; stakeholder support for the Restructuring Transaction; the expected process for and timing of implementing the Restructuring Transaction; the relief to be sought in the CBCA Proceedings in respect of the Plan of Arrangement and the Chapter 11 Proceedings; the completion of the Restructuring 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 Restructuring Transaction; and the effect of the Restructuring Transaction.

Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of the Stoneway Group to implement the Restructuring Transaction on the terms described in this press release; the ability of the Stoneway Group to receive all necessary court, third party and stakeholder approvals in order to complete the Restructuring Transaction; the ability of the Stoneway Group to operate in the ordinary course during the CBCA Proceedings and Chapter 11 Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Stoneway Group to continue as a going concern; the ability of the Stoneway Group to continue to realize its assets and discharge its liabilities and commitments; the Stoneway Group's future liquidity position, and access to capital, to fund ongoing operations and obligations (including debt obligations); and the ability of the Stoneway Group to stabilize its business and financial condition.

Although the Stoneway Group 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 Stoneway Group operates, may differ materially from any such information and statements in this news release. Other unknown or unpredictable factors also could harm the Stoneway Group'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 Stoneway Group 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.