Canadian Energy Services & Technology Corp. Announces Proposed Offering of $300 Million Senior Unsecured Notes and Tender Offer for Existing 7.375% Notes
Canadian Energy Services & Technology Corp. ("CES" or the "Corporation") (TSX:CEU)(OTCQX:CESDF) announced today that it intends to conduct a private placement offering (the "Offering") of $300.0 million aggregate principal amount of Senior Unsecured Notes due 2025 (the "Notes"). Subject to completion of the Offering, CES will use the net proceeds from the Offering, plus additional amounts available under its credit facility, to purchase for cash any and all of its outstanding $300.0 million, 7.375% Senior Unsecured Notes due April, 2020 with CUSIP number 13566WAA6 (the "7.375% Notes") from the holders thereof (the "Holders").
CES has engaged Scotia Capital Inc. and RBC Dominion Securities Inc. to lead a syndicate of underwriters to conduct the Offering of the Notes. The Notes will be guaranteed on a senior unsecured basis by current and future subsidiaries of CES that also guarantee the Corporation's credit facility. Specific terms of the Notes, including the interest rate will be determined at a time prior to the issuance of the Notes. The Notes will be offered to qualified buyers in Canada and the United States pursuant to exemptions from applicable prospectus and registration requirements under Canadian provincial securities laws and United States securities laws. Upon completion of the Offering CES will have extended the maturity profile of its senior note indebtedness to 2025.
CES also announced today that it has commenced an offer to purchase (the "Tender Offer") for cash any and all of its outstanding $300.0 million 7.375% Notes from Holders eligible to participate in the Tender Offer. The terms and conditions of the Tender Offer are set forth in the offer to purchase dated March 10, 2017 (the "Offer to Purchase") and in the related letter of transmittal ("Letter of Transmittal"), along with any amendments and supplements thereto, which Holders are urged to read carefully before making any decision with respect to the Tender Offer. The closing of the Tender Offer will be subject to a number of conditions, including the successful completion by CES of the Offering.
The Tender Offer is not being made in the United States or to, or for the account or benefit of, "U.S. holders" (as defined in the cross-border exemptions of the United States Securities Act of 1933, as amended (the "Securities Act"), and the United States Securities Exchange Act of 1934, as amended). Holders of 7.375% Notes with addresses in the United States or who are U.S. holders are excluded from, and are not eligible to participate in or tender their 7.375% Notes in the Tender Offer. Any tenders of 7.375% Notes from the United States or from, or for the account or benefit of, Holders of 7.375% Notes with addresses in the United States or who are U.S. holders will not be accepted in the Tender Offer and no payments of the Tender Offer consideration will be made into the United States or to, or for the account or benefit of, such Holders.
The Tender Offer will expire at 12:00 p.m., Toronto time, on March 24, 2017, unless extended (such date and time, as the same may be extended, the "Expiration Time"). Holders who tender (and do not withdraw) their 7.375% Notes on or prior to the Expiration Time will receive $1,042.00 for each $1,000 principal amount of 7.375% Notes accepted for purchase. Accrued and unpaid interest, up to, but not including, the payment date, which is expected to be March 28, 2017, will be paid in cash on all tendered 7.375% Notes accepted by CES for purchase in the Tender Offer. 7.375% Notes tendered may not be withdrawn on or following the Expiration Time except as may be required by law.
Following completion of the Offering and the Tender Offer, CES intends to redeem, in accordance with the terms of the trust indenture governing the 7.375% Notes, all of the 7.375% Notes which are not tendered to the Tender Offer prior to the Expiration Time (the "Redemption").
CES has retained Scotia Capital Inc. to act as Dealer Manager in connection with the Tender Offer. Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from Kingsdale Advisors, the Depositary and Information Agent for the Tender Offer, by phone at (866) 229-8874 or by email at email@example.com. Questions regarding the Tender Offer may be directed to the Depositary and Information Agent at this phone number. Questions regarding the Tender Offer may also be directed to the Dealer Manager at (416) 863-7257 attention Michael Lay.
The Notes sold pursuant to the Offering will be sold on a private placement basis only in an "offshore transaction" (as defined in Regulation S) in Canada to persons other than U.S. Persons in reliance on Regulation S and in the United States to "qualified institutional buyers" (as defined in Rule 144A ("Rule 144A") promulgated under the Securities Act) in accordance with Rule 144A. The offer and sale of the Notes have not been and will not be registered under the Securities Act, or applicable state securities laws, and the Notes may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons, absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Notes have not been and will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the Notes in Canada will be made on a basis exempt from the prospectus requirements of such securities laws.
No offer, solicitation, purchase or sale will be made in any jurisdiction, or to or from any person in which such offer, solicitation, purchase or sale would be unlawful, including, without limitation, the United States and to, from, or for the account or benefit of, any Holders of 7.375% Notes with addresses in the United States or who are U.S. holders. Any tenders of 7.375% Notes from the United States or from, or for the account or benefit of, Holders of 7.375% Notes with addresses in the United States or who are U.S. holders will not be accepted in the Tender Offer and no payments of the Tender Offer consideration will be made into the United States or to, or for the account or benefit of, such H
About Canadian Energy Services & Technology Corp.
CES is a leading provider of technically advanced consumable chemical solutions throughout the lifecycle of the oilfield. This includes solutions at the drill-bit, at the point of completion and stimulation, at the wellhead and pump-jack, and finally through to the pipeline and midstream market. CES' business model is relatively asset light and requires limited re-investment capital to grow. As a result, CES has been able to capitalize on the growing market demand for drilling fluids and production and specialty chemicals in North America while generating free cash flow.
Additional information about CES is available at www.sedar.com or on the Corporation's website at www.CanadianEnergyServices.com.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.