This new release contains "forward-looking and statements" within the
meaning of applicable securities laws. For a full disclosure of the
forward-looking information and statements and the risks to which they
are subject, see "Forward-Looking Information" later in this news
CALGARY, May 24, 2011 /CNW/ - Petrowest Energy Services Trust ("Petrowest" or the "Trust") is pleased to announce that its board of directors has unanimously
approved the conversion of the Trust from an income trust to a new
publicly listed corporation, Petrowest Corporation ("New Petrowest"), pursuant to a plan of arrangement under section 193 of the Business Corporations Act (Alberta) (the "Arrangement").
Petrowest will seek the approval of the Arrangement from the holders
(the "Unitholders") of trust units (the "Trust Units") and subordinated units (the "Subordinated Units", and together with the Trust Units, the "Units") of Petrowest at its 2011 annual and special meeting of Unitholders
(the "Meeting"). Petrowest has scheduled the Meeting to be held at 9:00 a.m.
(Calgary time) on June 29, 2011 in the Bennett Boardroom at the offices
of Bennett Jones LLP, 4500 Bankers Hall East, 855 - 2nd Street S.W., Calgary, Alberta.
The Arrangement requires the approval of Unitholders, as well as
customary court and regulatory approvals. To be approved, the special
resolution approving the Arrangement must be passed by a majority of
not less than 66 2/3% of the votes cast by Unitholders in person or
represented by proxy at the Meeting, voting as a single class, as well
as: (i) not less than 66 2/3% of votes cast by holders of Trust Units,
in person or represented by proxy at the Meeting; and (ii) not less
than 66 2/3% of votes cast by holders of Subordinated Units, in person
or represented by proxy at the Meeting, in each case voting as a
separate class. The Arrangement will also be subject to the minority
approval requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.
Under the Arrangement: (i) holders of Trust Units will receive one
common share in the capital of New Petrowest (each, a "Common Share") for each Trust Unit held; and (ii) holders of Subordinated Units will
receive one Common Share for each Subordinated Unit held that was
issued in 2010 and the remaining holders of Subordinated Units will
receive one-tenth of one Common Share for each Subordinated Unit held.
Also under the Arrangement, Petrowest's issued and outstanding 10%
convertible secured debentures and deferred trust units will be assumed
by New Petrowest.
Immediately following the completion of the Arrangement, it is expected
that the corporate structure of Petrowest will be simplified through
the dissolution of the Trust and Petrowest Energy Services Business
Trust, as well as through the amalgamation of Petrowest's corporate
The proposed Arrangement will be completed in compliance with the
exchange method provided for under the Income Tax Act (Canada) and is intended to be tax deferred for Canadian residents.
It is a condition of the Arrangement that the Common Shares issued by
New Petrowest pursuant to the Arrangement be listed for trading on the
Toronto Stock Exchange following the completion of the Arrangement. It
is anticipated that the Trust Units will be delisted following
completion of the Arrangement.
Petrowest's senior management team and directors are expected to
continue to serve in their current roles with New Petrowest. A
management information circular outlining the details of the matters to
be dealt with at the Meeting, including the Arrangement, is expected to
be mailed to Unitholders on or about May 31, 2011 and will be available
on SEDAR (www.sedar.com). Subject to the receipt of all necessary approvals, the Trust
anticipates the Arrangement will be completed on or about July 1, 2011.
UPDATE ON REFINANCING
Since the maturity of Petrowest's existing credit facility on April 30,
2011, the Trust has been in discussions with its existing lending
syndicate regarding an extension of time to provide the necessary time
to close and fund a new credit facility. The Trust is in advanced
negotiations with three institutions to provide a new credit facility
which will be utilized, in part, to pay out the existing credit
facility. However, neither an extension to the existing credit facility
nor a new credit facility has been obtained at this time and there is
no assurance that Petrowest will be able to obtain an extension to the
existing credit facility or enter into a new credit facility on
acceptable terms and conditions.
Petrowest is a leading provider of pre-drilling and post-completion
energy and civil infrastructure services to the northern region of the
western Canadian sedimentary basin. Petrowest is an unincorporated,
open-ended, limited purpose, mutual fund trust established under the
laws of Alberta.
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements that involve
substantial known and unknown risks and uncertainties. These
forward-looking statements are identified by their use of terms and
phrases such as "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "expect", or similar words suggesting future
outcomes or language suggesting an outlook. This news release contains
forward-looking information pertaining to, among other things, the
conversion of Petrowest from an income trust structure to a corporate
structure; the timing of the completion of the Arrangement; the
exchange of Units for Common Shares; the assumption of the debentures
and deferred trust units by New Petrowest; the effective date of the
Arrangement; the satisfaction of conditions for listing on the TSX; the
composition of the Board of Directors and management of New Petrowest
upon completion of the Arrangement; the ability to obtain required
consents, permits or approvals, including, but not limited to,
Unitholder, Court and regulatory approvals of the Arrangement; the
extension of the necessary existing credit facility; and the entering
into of a new credit facility. Forward-looking statements and
information are based on Petrowest's current beliefs as well as
assumptions made by, and information currently available, to Petrowest
concerning anticipated business performance. Although management of
Petrowest considers these assumptions to be reasonable based on
information currently available to it, they may prove to be incorrect.
Factors that could cause actual results to vary from forward-looking
information include, among other things, the failure to obtain the
regulatory and Court approvals required to complete the Arrangement or
the failure to obtain such approvals on terms acceptable to Petrowest;
the failure of Unitholders to approve the Arrangement; the failure of
the Trust or New Petrowest to obtain all third party consents,
approvals and authorizations; and changes in tax laws and incentive
programs relating to the oil and gas industry and income trusts,
including the impact of legislation relating to the taxation of
"specified investment flow-through" entities and the conversion of
income trusts into corporations. If any of these, or other
uncertainties, materialize the actual results of Petrowest may vary
materially from those expected.
Forward-looking statements are subject to many external variables that
are beyond Petrowest's control, such as fluctuating prices for crude
oil and natural gas, changes in drilling activity, and general local
and global economic, political, business and weather conditions. If any
of these, or other uncertainties, materialize the actual results of
Petrowest may vary materially from those expected.
SOURCE Petrowest Energy Services Trust
For further information:
please contact Richard Quigley, President and CEO, or Lloyd A. Wiggins, Chief Financial Officer, at (780) 830-0881 or email@example.com.