NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
CALGARY, Dec. 16, 2015 /CNW/ - Calfrac Well Services Ltd. ("Calfrac") (TSX–CFW) is pleased to announce that it has entered into an agreement with Peters & Co. Limited, as lead underwriter on behalf of a syndicate of underwriters including HSBC Securities (Canada) Inc., RBC Capital Markets, AltaCorp Capital Inc., CIBC World Markets Inc., Scotia Capital Inc. and FirstEnergy Capital Corp. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal private placement basis, 20,370,370 common shares of Calfrac ("Shares") at a price of $1.35 per Share for total gross proceeds of approximately $27.5 million (the "Offering").
The net proceeds of the Offering are expected to be held in a segregated account such that they may be utilized in the calculation of EBITDA towards Calfrac's covenant to maintain a specified funded debt to EBITDA ratio ("Leverage Ratio"). The application of new equity issue proceeds in this manner, referred to as an "Equity Cure", may take place in any of the quarters ending prior to and including December 31, 2017, subject to certain conditions. If the net proceeds are not utilized as an Equity Cure, it is expected that they will be used by Calfrac to fund capital expenditures, to reduce Calfrac's outstanding indebtedness and/or for general working capital and corporate purposes.
Calfrac's largest single shareholder, Matco Investments Ltd., will be participating in the Offering to at least its effective pro rata ownership percentage (20.45%). The Offering is scheduled to close on or about December 22, 2015 and is subject to customary conditions, including receipt of all necessary regulatory approvals and the approval of the Toronto Stock Exchange.
Fernando Aguilar, President and Chief Executive Officer, commented, "The completion of this Offering complements the recent announcement of the new covenant package for our credit facilities. Although we do not currently expect that we will need to use the Equity Cure option within the next two years, this Offering has now fully funded that option and provides assurance that Calfrac will be positioned to avail itself of all of the flexibility afforded by the new covenant revisions."
This news release does not constitute an offer to sell or a solicitation of any offer to buy the securities in the United States. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of such Act.
Calfrac's common shares are publicly traded on the Toronto Stock Exchange under the trading symbol "CFW". Calfrac provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada, the United States, Russia, Argentina and Mexico.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to the anticipated closing date of the Offering, the use of proceeds therefrom, Calfrac's Leverage Ratio and the utilization of the Equity Cure option. These forward-looking statements and information are based on certain key expectations and assumptions made by Calfrac. Although Calfrac believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Calfrac cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the ability of Calfrac to obtain the required regulatory approvals to complete the Offering; prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, component parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; health, safety and environmental risks; exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; governmental regulations; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations.
Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other risk factors that could affect Calfrac's operations or financial results are included in Calfrac's annual information form and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Calfrac does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Calfrac Well Services Ltd.
For further information: Fernando Aguilar, President and Chief Executive Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Michael J. McNulty, Chief Financial Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Ashley Connolly, Manager, Capital Markets, Telephone: (403) 266-6000, Fax: (403) 266-7381