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Western Energy Services Corp. Announces That It Has Filed And Obtained A Receipt For A Final Prospectus For Its Rights Offering

Press Release

CALGARY, ALBERTA – Western Energy Services Corp. (the “Company” or “Western”) (TSX: WRG) announces that it has filed with the securities regulatory authorities in all the provinces of Canada and obtained a receipt for a final short form prospectus (the “Final Prospectus”) with respect to the previously announced rights offering to its shareholders to raise $31.5 million (the “Rights Offering”). The Company has also concurrently filed an amendment to its registration statement on Form F-7/A with the United States Securities and Exchange Commission in the United States relating to the Rights Offering.

Pursuant to the Rights Offering, all eligible shareholders of Western (subject to applicable law) will receive one right (a “Right”) for every common share (a “Common Share”) held by the shareholder as of 5:00 p.m. (Toronto time) on April 19, 2022 (the “Record Date”) . Each Right will entitle an eligible holder to purchase 21.4488803374 Common Shares (the “Basic Subscription Privilege”) at the subscription price of $0.016 per share until 5:00 p.m. (Toronto time) on May 13, 2022 (the “Expiry Date”). The Rights Offering includes an additional subscription privilege entitling holders of Rights who have fully exercised their Rights to subscribe for additional Common Shares, if available, that are not otherwise subscribed for under the Rights Offering. Where the exercise of Rights would otherwise entitle a holder of Rights to receive fractional Common Shares, the holder’s entitlement will be reduced to the next lowest whole number of Common Shares.

The Rights will be listed on April 18, 2022, under the symbol “WRG.RT” and will cease trading at 12:00 p.m. (Toronto time) on the Expiry Date.

Under the Rights Offering, any Rights that would otherwise be distributed by the Company to shareholders who are not resident in the provinces of Canada or the United States, will instead be delivered to the subscription agent appointed by the Company, who will hold such Rights as agent for the benefit of all such ineligible holders. Further information regarding the treatment of Rights issued to shareholders resident in ineligible jurisdictions is included in the Final Prospectus.

The Rights Offering is being conducted in connection with the Company’s debt restructuring agreement with Alberta Investment Management Corporation. (“AIMCo”), the lender under its second lien term loan facility (the “Restructuring Transaction”), as disclosed in the Company’s press release dated March 22, 2022, which will include the conversion of $ 100 million of the principal amount outstanding under the second lien facility into Common Shares at an issue price of $0.05 per Common Share. G2S2 Capital Inc. (“G2S2”), G2S2’s subsidiary Armco Alberta Inc. (“Armco”), Ronald P. Mathison and Matco Investments Ltd. (“Matco”) have entered into a standby purchase agreement with the Company wherein G2S2, Matco, and Mr. Mathison have agreed to exercise in full their Basic Subscription Privilege and, in the case of each of G2S2, Armco and Matco (collectively, the “Standby Purchasers”), will purchase any shares not subscribed for by other eligible shareholders under the Rights Offering, either directly or through an affiliate. AIMCo has agreed that it will not exercise the Rights issued to it in the Rights Offering.

It is expected that the closing date of the Rights Offering and Restructuring Transaction will be two business days following the Expiry Date. The Rights Offering and the Debt Restructuring Agreement are subject to a number of conditions, including completion of the purchase commitments by the Standby Purchasers to the extent required.

Subject to applicable law, a certificate representing the Rights issued, together with the Final Prospectus will be distributed to all eligible registered shareholders who hold Common Shares on the Record Date, along with instructions explaining the number of Common Shares that can be purchased for those Rights, how to subscribe for the purchase of Common Shares pursuant to those Rights or instruct such shareholder’s broker to subscribe for the purchase of Common Shares on the shareholder’s behalf, and how to sell Rights in the market or otherwise transfer them to another party.

Further, more detailed information regarding the Rights Offering and the Restructuring Transaction is included in the Final Prospectus which is filed on SEDAR under Western’s profile at www.sedar.com and the Form F-7/A registration statement (File No. 333-264003) which is filed with the United States Securities and Exchange Commission on EDGAR at www.sec.gov.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities of the Company in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

About Western

Western is an oilfield service company which provides contract drilling services through its division, Horizon Drilling in Canada, and its wholly owned subsidiary, Stoneham Drilling Corporation in the United States. Additionally, Western provides production services in Canada through its wholly-owned subsidiary Western Production Services Corp. and through its division, Eagle Well Servicing which provides well servicing, and its division Aero Rental Services which provides oilfield rental services.

For more information, please contact: Alex R.N. MacAusland, President and CEO, or Jeffrey K.
Bowers, Senior VP Finance and CFO at 403.984.5916.

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