Delphi Energy Announces Completion of Restructuring Transaction and Changes to Director and Executive Personnel

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CALGARY, Alberta, Oct. 16, 2020 (GLOBE NEWSWIRE) — Delphi Energy Corp. (“Delphi” or the “Company“) is pleased to announce the completion of the previously disclosed restructuring which was implemented pursuant to a plan of compromise and arrangement (the “Plan“) under the Companies' Creditors Arrangement Act (“CCAA“) and the Canada Business Corporations Act (“CBCA“). The Plan was sanctioned by order of the Court of Queen's Bench of Alberta under the CCAA granted on September 11, 2020.

Pursuant to the restructuring, among other things:

  • Company indebtedness was reduced by approximately $176.0 million;
  • All previously outstanding common shares, warrants and options of the Company were cancelled and extinguished for no consideration and without any return of capital;
  • In exchange for an approximately $22.9 million investment, the Company issued (i) 1,522,181 Class A Common Shares in the capital of the Company (“New Shares“) to Kiwetinohk Resources Corp. (“KRC“), representing 25% of the issued and outstanding New Shares (on a non-diluted basis), plus (ii) purchase warrants (“New Warrants“) that are exercisable into such number of New Shares as will result in KRC holding 50%+1 of the issued and outstanding New Shares for payment of an aggregate exercise price equal to approximately $37.5 million;
  • In exchange for an $8.75 million investment, the Company issued an aggregate of 583,332 New Shares, representing approximately 9.6% of the issued and outstanding New Shares, to Luminus Energy IE Designated Activity Company (“Luminus Energy“), Concise Capital Management, LP (“Concise“) and Stornoway Portfolio Management, Inc. (“Stornoway“), directly and/or through their managed funds;
  • The Company issued an aggregate of 3,983,211 New Shares to secured creditors in settlement of amounts owing to them;
  • Second lien beneficial noteholders holding $897,000 face value of second lien notes received an aggregate of $224,250 of cash payments pursuant to valid Second Lien Opt-Out Elections (as such term is defined in the Plan);
  • General unsecured creditors (“General Unsecured Creditors“) of the Company and its subsidiaries with accepted claims less than or equal to $5,000 (“Convenience Class Creditors“), and other General Unsecured Creditors who validly made elections to be treated as Convenience Class Creditors, were paid in full up to $5,000;
  • All other General Unsecured Creditors, including second lien beneficial noteholders in respect of a deficiency claim in the aggregate amount of approximately $86.7 million, became entitled to payment in respect of their accepted claims based on their pro rata share of a General Unsecured Creditor cash pool in the amount of $3 million, less amounts required to fund payments to Convenience Class Creditors; and
  • Delphi granted to certain officers of the Company options (“Options“) and restricted share units entitling them to earn in the aggregate 10% of the issued and outstanding New Shares (on a non-diluted basis). Other than Options and restricted share units and the New Warrants discussed above, there are no other convertible securities of the Company pursuant to which New Shares may be issued.

As a result of the completion of the restructuring, there are 6,088,724 New Shares issued and outstanding. The restructuring and the Plan, as well as the terms and conditions of the New Warrants, are more fully described in the information circular of the Company dated July 29, 2020 filed on SEDAR at www.sedar.com.

The Company is also pleased to announce that, concurrently with completion of the Plan, it has entered into a credit agreement with ATB Financial providing for a $30 million senior secured revolving credit facility. The facility is available on a revolving basis until May 31, 2021, at which time it may be extended at the lender's option.

BOARD AND MANAGEMENT CHANGES

In connection with the restructuring, Delphi announces that, effective October 16, 2020,

  • David J. Reid, having founded the Company in 2003, has elected to retire as President and Chief Executive Officer, and has resigned from the Board of Directors. Mr. Reid will continue to provide advisory services to the Company.
  • Timothy Schneider has been appointed President, Chief Executive Officer and Chairman.
  • P. Eric Gallie has been appointed Chief Financial Officer.
  • Kevin Brown and Pat Carlson, each a nominee of KRC, have joined as directors.

Timothy Schneider, President and Chief Executive Officer, commented: “We are pleased with the outcome of the CCAA proceedings and grateful for the support of Delphi's employees who remained dedicated to fulfilling their responsibilities despite the arduous restructuring process and strains of the COVID-19 pandemic. The Company will emerge from CCAA stronger and more sustainable, supported by over $70 million of capital and liquidity secured by the Company from KRC, ATB Financial and the Plan sponsors Luminus …

Full story available on Benzinga.com

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