Perpetual Energy Inc. (TSX: PMT) has entered into a series of strategic financing initiatives led by Alberta Investment Management Corporation (AIMCo) that will underpin the execution of its 2017 capital program while strengthening its liquidity and debt repayment profile.
The financing initiatives consist of
- a $45 million second lien senior secured term loan provided by AIMCo, repayable four years following the date of closing and bearing interest at 8.1% per annum, as well as 120 warrants for every $1,000 committed under the second lien facility;
- a $9 million non-brokered equity private placement, half of it to be subscribed by AIMCo; and
- an increase and extension of Perpetual’s current bank lending arrangements to October 31, 2017, providing for a $14 million increase in total borrowing capacity under the credit facility to $20 million.
The financing transactions are expected to close in early March 2017, subject to customary closing conditions. Peters & Co. Limited is acting as financial advisor Perpetual with respect to the transactions.
“Collectively, these Financing Transactions, combined with the previously announced extension of maturity of $17.4 million of our unsecured senior notes to 2022, significantly strengthen Perpetual’s liquidity and debt repayment profile and secure funding for our attractive 2017 and 2018 business plan,” commented Sue Riddell Rose, President & CEO of Perpetual.
“On behalf of our clients, AIMCo is very pleased to have the opportunity to enter into this strategic financing relationship with Perpetual Energy,” said Peter Pontikes, Executive Vice-President, Public Equities of AIMCo. “Perpetual has a demonstrated history of resiliency in its ability to manage through the cyclicality of Alberta’s energy sector. Led by an accomplished management team, we are confident that our investment provides this innovative company with the flexibility to weather the current market downturn and allow them to position for future growth.”
photo credit: Perpetual Energy