CALGARY, July 15, 2016 /CNW/ - (TSX: TBE) – Twin Butte Energy Ltd. ("Twin Butte" or the "Company") is pleased to announce that it has mailed its Management Information Circular and related voting materials to Twin Butte shareholders and debentureholders (collectively, the "Twin Butte Securityholders") in connection with the annual and special meeting to be held on August 10, 2016 (the "Meeting"). At the Meeting, Twin Butte Securityholders will be asked to, among other things, approve the plan of arrangement as initially announced on June 24, 2016 (the "Arrangement") in respect of Twin Butte and the Twin Butte Securityholders and involving Reignwood Resources Holding Pte. Ltd. (the "Purchaser") and Reignwood Resources Trading UK Limited (the "Acquiror"). Closing of the Arrangement remains on track to occur in mid-August 2016. Copies of the meeting materials mailed to the Twin Butte Securityholders have been filed on Twin Butte's SEDAR profile and are available for viewing at www.sedar.com and www.twinbutteenergy.com.
Details of the Arrangement
Pursuant to the Arrangement, the Purchaser will, indirectly through its wholly owned subsidiary (the Acquiror), acquire: (i) all of the outstanding common shares of Twin Butte for cash consideration of $0.06 per share; and (ii) all of the outstanding 6.25% convertible unsecured subordinated debentures due December 31, 2018 of Twin Butte for cash consideration of $140 per $1,000 principal amount of debentures, plus accrued and unpaid interest thereon. Assuming the Arrangement closes on or about August 15, 2016, the accrued and unpaid interest payable on the debentures would be approximately $38.87 per $1,000. This includes the deferred semi-annual interest payment that was payable on June 30, 2016.
Board Recommends Securityholders Vote in Favour of the Arrangement
After an extensive review of the Company's strategic and financial options, the board of directors of Twin Butte has unanimously: (i) determined that the Arrangement is in the best interests of Twin Butte and the Twin Butte Securityholders; (ii) resolved to recommend that Twin Butte Securityholders vote in favor of the Arrangement; and (iii) determined that the consideration to be received by Twin Butte Securityholders pursuant to the Arrangement is fair to the Twin Butte Securityholders.
The board of directors of Twin Butte UNANIMOUSLY recommends that the Twin Butte Securityholders vote "FOR" the Arrangement.
Securityholder Approval is Important - Vote Today
The Arrangement provides certainty of value and near-term liquidity to Twin Butte Securityholders in a challenging commodity price environment. If the Twin Butte Securityholders do not approve the Arrangement, the Purchaser (and the Company) has the right to terminate the arrangement agreement which would trigger an event of default under the Company's credit facilities. Such an event of default under the credit facilities would allow the bank syndicate to accelerate the repayment of the Company's outstanding bank debt. In such event, the lenders likely course of action would be to enforce their security by appointing a receiver to liquidate the Company's assets and manage the Company's affairs, which could result in the Twin Butte Securityholders (including debentureholders) receiving no consideration for their securities. Twin Butte Securityholders may vote by following the instructions found on their form of proxy or voting instruction form.
About Twin Butte
Twin Butte Energy Ltd. is a value oriented intermediate producer with a deep, low risk, drilling inventory focused on medium and heavy oil reservoirs. The common shares of Twin Butte are listed on the TSX under the symbol "TBE" and the debentures are listed on the TSX under the symbol "TBE.DB".
Certain information set forth in this press release, including information and statements which may contain words such as "could", "plans", "should", "anticipates", "expects", "believes", "will" and similar expressions and statements relating to matters that are not historical facts, contain forward-looking statements, including but not limited to statements regarding: the Arrangement and the anticipated timing of closing; the accrued and unpaid interest payable on the debentures on closing; the expected benefits of the Arrangement; and the potential consequences for Twin Butte Securityholders if the Arrangement is not completed (including any action by the lenders under the Company's credit facilities). By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Twin Butte's control. Completion of the Arrangement is subject to a number of conditions which are typical for transactions of this nature. Failure to satisfy any of these conditions, the emergence of a superior proposal or the failure to obtain approval of the Twin Butte Securityholders may result in the termination of the arrangement agreement. The foregoing list is not exhaustive. Additional information on these and other risks that could affect completion of the Arrangement will be set forth in the information circular, which will be available on SEDAR at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The actual results, performance or achievement of Twin Butte could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Twin Butte will derive therefrom. Twin Butte disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
SOURCE Twin Butte Energy Ltd.
For further information: on voting instructions please contact: Laurel Hill Advisory Group, North American Toll-Free Number: 1-877-452-7184, Collect Calls Outside North America: 416-304-0211, Email: [email protected]; For further information about Twin Butte, please contact: Twin Butte Energy Ltd., Rob Wollmann, President and Chief Executive Officer, R. Alan Steele, Vice President Finance, Chief Financial Officer and Corporate Secretary, Tel: (403) 215-2045, Website: www.twinbutteenergy.com