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 .