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Perpetual Energy proposes exchange of 8¾% senior notes due 2022
By Rebecca Melvin
New York, Dec. 16 – Perpetual Energy Inc. is proposing to exchange its outstanding 8¾% senior notes due Jan. 23, 2022 for new 8¾% secured third-lien notes due Jan. 23, 2025 under a court-approved plan of arrangement, according to a company news release.
The new Regulation S notes will be issued under a new trust indenture with substantially the same terms as the old notes except that the new notes will be secured on a third-term basis subordinate to senior debt and interest will be paid either in cash, additional new notes (PIK interest payment) or a combination of cash and notes.
Holders of new notes will receive C$43.75 per C$1,000 principal amount of notes in a PIK interest payment, representing all accrued and unpaid interest outstanding from July 23, 2020 up to, but excluding, Jan. 23, 2021, as the first interest payment.
The exchange is being undertaken under an interim court order. A special meeting of noteholders and a special meeting of shareholders is scheduled Jan. 22, 2021 at 11 a.m. ET and 11:30 a.m. ET, respectively, to consider and vote on approval of the exchange arrangement. If approved, the company will appear before the court to seek a final order on Jan. 22.
The company pointed out that the arrangement has been undertaken in consultation with its legal and financial advisers, including Peters & Co. Ltd., an independent financial adviser, and that as of Dec. 15, the note exchange was deemed fair from a financial point of view to the noteholders.
The exchange arrangement is also subject to customary conditions, including entering into of an intercreditor agreement with the company’s first- and second-lien lenders.
Perpetual Energy is a Calgary, Alta., energy company.
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