Calfrac Announces Commencement of Tender Offer and Consent Solicitation for
7.75% Senior Notes Due 2015
CALGARY, Nov. 3 /CNW/ - Calfrac Well Services Ltd. ("Calfrac") (TSX-CFW) announced today that Calfrac Holdings LP ("Calfrac Holdings"), a Delaware limited partnership which is indirectly wholly owned by Calfrac, is launching a tender offer and consent solicitation for its outstanding 7.75% Senior Notes due 2015 (the "Notes").
Calfrac Holdings is offering to purchase any and all of the outstanding Notes (the "Tender Offer"). Calfrac Holdings also is soliciting consents (the "Solicitation") to certain proposed amendments to the indenture governing the Notes. The proposed amendments would eliminate or modify substantially all of the restrictive covenants and certain events of default contained in the indenture governing the Notes. Holders who tender their Notes will be required to consent to the proposed amendments, and holders who consent to the proposed amendments will be required to tender their Notes.
The Tender Offer and Solicitation are being made by Calfrac Holdings pursuant to an offer to purchase and consent solicitation statement and a related letter of transmittal, each dated as of November 3, 2010. The Tender Offer will expire at 11:59 p.m., New York City time, on December 2, 2010, unless extended (the "Expiration Date").
Payment for the Notes validly tendered (and not validly withdrawn) and the consents validly delivered (and not validly revoked) will be made on a date promptly following the Expiration Date (the "Final Payment Date"). A consent payment will be paid to holders who tender Notes and deliver consents on or prior to 5:00 p.m., New York City time, on November 17, 2010 (the "Consent Date"), unless extended. The Tender Offer contemplates an early settlement option, so that holders whose Notes are validly tendered on or prior to the Consent Date and accepted for purchase could receive payment as early as November 18, 2010 (as may be extended by Calfrac Holdings at its sole discretion, the "Early Payment Date").
The total consideration, as more fully described in the Offer to Purchase, for each $1,000 principal amount of Notes to be paid for each validly tendered Note will be the redemption price of the Notes plus scheduled interest to February 15, 2011 (the first optional redemption date with respect to the Notes) discounted based on a yield to February 15, 2011 that is equal to the sum of (i) the yield on the 0.875% U.S. Treasury note due February 28, 2011, and (ii) a fixed spread of 50 basis points, minus accrued and unpaid interest from the last interest payment date to, but not including, the Early Payment Date. The purchase price for the Notes will be set at 12:00 p.m., New York City time, on November 17, 2010, unless the Consent Date is extended.
The total consideration includes a consent payment of $30 per $1,000 of principal amount of Notes and will be paid on the Early Payment Date or Final Payment Date, as applicable, to holders who tender their Notes and provide their consents to the proposed amendments on or prior to the Consent Date. Notes tendered and consents delivered on or prior to the Withdrawal Date may not be withdrawn or revoked after that time. Holders of Notes tendered after the Consent Date will receive the tender offer consideration which is equal to the total consideration minus the consent payment. In addition, accrued and unpaid interest will be paid on the tendered Notes up to but not including the Early Payment Date or Final Payment Date, as applicable.
The Tender Offer and the Solicitation are contingent upon, among other things, the tender of at least a majority of the outstanding principal amount of the Notes and the consummation of Calfrac Holdings' offering of new notes on terms satisfactory to Calfrac Holdings in an amount sufficient to allow for the repurchase of all of the tendered Notes on or prior to the Early Acceptance Date. Calfrac Holdings may amend, extend or terminate the Tender Offer and Solicitation at its sole discretion.
This press release does not constitute an offer to purchase any Notes or a solicitation of consents. Any offer to purchase the Notes or solicitation of consents will be made by means of an offer to purchase and consent solicitation statement and related letter of transmittal. No offer, solicitation or purchase will be made in any jurisdiction in which such an offer, solicitation or purchase would be unlawful.
Calfrac Holdings has engaged RBC Capital Markets, LLC to act as dealer manager and solicitation agent for the Tender Offer and the Solicitation and Bondholder Communications Group, LLC to act as information and tender agent for the Tender Offer. Persons with questions regarding the Tender Offer or Solicitation should contact RBC Capital Markets, LLC at (212) 618-7822 or (877) 381-2099 (toll-free). Requests for documents may be directed to Bondholder Communications Group, LLC at (212) 809-2663.
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, Mexico and Argentina.
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 concerning the completion of the Tender Offer and Solicitation, as well as the completion of the offering and the use of proceeds of the offering. 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, 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; 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.
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For further information: For further information:
Persons with questions regarding the Tender Offer or Solicitation should contact RBC Capital Markets, LLC at (212) 618-7822 or (877) 381-2099 (toll-free). Requests for documents may be directed to Bondholder Communications Group, LLC at (212) 809-2663.
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