/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, March 29, 2018 /CNW/ - Ensign Energy Services Inc. ("Ensign" or the "Corporation") (TSX: ESI) is pleased to announce the closing of a non-brokered private placement (the "Offering") of unsecured, subordinated convertible debentures of the Corporation (the "Debentures"), for gross proceeds of CAD $25.95 million. The Debentures bear interest from the date of closing at 7.0% per annum, payable semi-annually in arrears, on April 1 and October 1 of each year, with the first payment of interest due on October 1, 2018. The Debentures will mature on January 31, 2022 (the "Maturity Date"). The Corporation may complete an additional closing of the Offering for up to CAD $10 million in order to accommodate additional subscribers.
The Debentures are convertible at the option of the holder into common shares of the Corporation ("Common Shares") at any time prior to the close of business on the Maturity Date upon at least 61 days prior notice, at a conversion price of $7.00 per Common Share, subject to customary anti-dilution adjustments (the "Conversion Price"). Holders converting their Debentures will receive accrued and unpaid interest thereon (if any), up to, but excluding, the date of conversion.
If, on and after April 1, 2021, the closing price of the Common Shares on the Toronto Stock Exchange exceeds 125% of the Conversion Price for at least 30 consecutive trading days, the Debentures may be redeemed by the Corporation for cash, in whole or in part from time to time, on not more than 90 days and not less than 60 days prior notice, at a redemption price equal to the outstanding principal amount of the Debentures plus accrued and unpaid interest thereon (if any), up to, but excluding, the date of redemption.
The net proceeds of the Offering will be used by the Corporation for general corporate and working capital purposes.
Related Party Matters
N. Murray Edwards, Barth Whitham, James Howe, Cary Moomjian and Robert Geddes, all directors of the Corporation (collectively, the "Holders"), purchased $20,000,000, $5,000,000, $500,000, $250,000 and $200,000 of the Debentures, respectively. Mr. Edwards holds approximately 17.30% of the outstanding Common Shares on a non-diluted basis, and together with Mr. Whitham, Mr. Howe, Mr. Moomjian and Mr. Geddes, the Holders own 18.09% of the outstanding Common Shares on a non-diluted basis. Accordingly, the participation of the Holders in the Offering are considered each to be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). Pursuant to MI 61-101, Ensign has filed a material change report providing disclosure in relation to the related party transactions on SEDAR under Ensign's issuer profile at www.sedar.com. The Corporation did not file the material change report more than 21 days before the expected closing date of the Offering as the definitive documentation for the Offering and the participation by the related parties was not settled until shortly before the closing of the Offering, and the Corporation wished to close the Offering on an expedited basis for sound business reasons.
The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as at the time the Offering was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Offering exceeds 25% of the Corporation's market capitalization.
The Offering, including the subscription of the Holders, was unanimously approved on March 27, 2018 by the board of directors of the Corporation (with each Holder abstaining).
U.S. Securities Laws
The Debentures and the Common Shares issuable on conversion thereof have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of those laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, or for the account or benefit of U.S persons.
Cautionary Statements on Forward-looking Information
Certain statements in this news release constitute forward-looking statements or information (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements generally can be identified by the words "believe", "anticipate", "expect", "plan", "estimate", "target", "continue", "could", "intend", "may", "potential", "predict", "should", "will", "objective", "project", "forecast", "goal", "guidance", "outlook", "effort", "seeks", "schedule" or expressions of a similar nature suggesting future outcome or statements regarding an outlook. In particular, this news release contains forward-looking statements pertaining to the use of proceeds from the Offering and the additional closing of the Offering.
These forward-looking statements are subject to, and may be affected by, numerous risks and uncertainties, some of which are beyond Ensign's control. Risks that could cause or contribute to these differences include the factors described in Ensign's public reports and filings, which are available under Ensign's profile at www.sedar.com. The forward-looking information contained herein is provided as at the date hereof and Ensign does not undertake update, correct or revise any forward-looking statements as a result of any new information, future events or otherwise, except as may be required by applicable law.
About Ensign
Ensign is a global leader in oilfield services, headquartered out of Calgary, Alberta, operating in Canada, the United States and internationally. We are one of the world's top land-based drilling and well servicing contractors serving crude oil, natural gas and geothermal operators. Our premium services include contract drilling, directional drilling, underbalanced and managed pressure drilling, rental equipment, well servicing and production services. Please visit our website at ensignenergy.com.
Ensign's Common Shares are publicly traded though the facilities of the Toronto Stock Exchange under the trading symbol ESI.
SOURCE Ensign Energy Services Inc.
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Ensign Energy Services Inc., 400 - 5th Avenue S.W., Suite 1000, Calgary, Alberta, T2P 0L6, Canada, Mr. Michael Gray, Chief Financial Officer, Telephone: 403.262.1361Copyright CNW Group 2018
