Petrowest Corporation ("Petrowest" or the "Company") (TSX:PRW) announces the achievement of certain important milestones in its restructuring and refinancing efforts. Over the next several months the Company plans to reposition itself as a highly focused provider of heavy construction and infrastructure services with a strong balance sheet. To fully achieve this goal, Petrowest has embarked on a multi-pronged process to dispose of non-core assets, to reduce debt levels, and to right-size the organization in the context of the future business plan.
Petrowest is pleased to announce that Mr. Sami Saad, current President and Chief Operating Officer, has been appointed as Chief Executive Officer in replacement of Mr. Rick Quigley, effective today. Mr. Garry Wetsch, Board member, stated "We are delighted that Sami has agreed to accept increased responsibility for the on-going development and implementation of the new business strategy for the Company and we have full confidence in his ability to continue to effect positive change that will result in Petrowest becoming a leading company in the businesses we operate as well as managing our investment in the Site C partnership." Mr. Saad has a long history in the construction and EPC sectors, and stated "I am looking forward to maximizing the opportunities inherent in Petrowest that result from its people, its large asset base and its strong history in providing heavy earth construction services to the oil & gas industry and to the government and municipal infrastructure sectors in western Canada. My goal is to ensure Petrowest operates safely, profitably and with a strong commitment to community all while providing shareholders with attractive growth in value."
Board of Director Changes
As the Company enters into a new phase of growth and development, the Board has determined that it should be reconstituted to better meet the go-forward needs. Specifically, the Board has concluded the appropriate number of members should be reduced from the current seven, and that new members should be added with skills and experience that can provide effective oversight in the context of the new business strategy. As the initial step in this process, Mr. James Coleman, Mr. Dan Tsubouchi, and Mr. Paul Shelley have announced their resignation effective May 18, 2017. The Board will consist of four current members being Mr. Garry Wetsch, Mr. Roy Larson, Mr. Gerry Romanzin and Mr. Rick Quigley who will be joined by Mr. Sami Saad, CEO. An additional board member will be nominated by Crown Capital and added to the Board in due course.
Mr. Gerry Romanzin stated "On behalf the Company, its employees and shareholders I wish to acknowledge the contribution of the retiring Board members. The past two years have been very difficult for our industry and our Company, and their steady-handed guidance was able to get us through this period to the point where we are now on a clear path to recovery. Each has served with a high level of skill and professionalism and Petrowest is grateful for their time with us."
Petrowest continues to advance its non-core asset and division disposition program. The Company is in negotiations with respect to the sale of its R Bee Crushing division which operates western Canada's largest rock crushing business. In addition, surplus equipment has been identified that will be offered for sale either at auction or privately, and other non-core assets are in various stages of marketing. While there is no certainty that any sale of assets will be completed, the used heavy equipment market in Canada is strong driven in part by an uptick in oil & gas activity, increased infrastructure work and a strong U.S. dollar.
The Company has arranged for financing necessary to complete the restructuring plan. The existing bank syndicate has agreed to extend the waiver period from May 19, 2017 to September 30, 2017. The amount of credit available under the existing bank facilities has been set at $38 million which is the amount currently outstanding. It is anticipated that proceeds from the sale of non-core assets will be sufficient to fully repay the bank loans on or before September 30, 2017.
The Company announces that it has closed today a financing with Crown Capital for a $12 million Bridge Loan that matures on November 30, 2017. The Bridge Loan is expected to be repaid with proceeds received on the sale of non-core assets that exceed amounts applied to the repayment of the senior bank debt. The Bridge Loan will be used to fund the Company's working capital needs through the restructuring period. In addition, Crown has agreed to refinance the existing $15 million Term Loan maturing September 2018 with a new $15 million Term Loan maturing May 2020 which was issued today. In connection with the Crown financings Petrowest has issued 7.3 million common shares to Crown and its affiliates and has cancelled the 4.3 million common share purchase warrants previously issued to Crown.
SOURCE: Petrowest Corporation
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