HONG KONG, CHINA and CALGARY, ALBERTA–(Marketwired – Sept. 11, 2016) – The Board of Directors (the “Board“) of Sunshine Oilsands Ltd. (the “Corporation” or “Sunshine“) (HKEX:2012) is pleased to announce the following:
LONG-TERM FORBEARANCE WITH NOTEHOLDERS
Reference is made to the announcements of the Corporation dated August 5, 2014, August 8, 2014 and February 5, 2016 (all Hong Kong time) in relation to, among other things, the offering of US$200 million principal amount of senior secured notes (the “Notes“). Reference is also made to the announcements of the Corporation dated August 1, 2016, August 12, 2016, August 17, 2016, August 29, 2016 and September 1, 2016 (all Hong Kong time) in relation to, among other things, the forbearance agreements the Corporation has entered into with the holders of the Notes (the “Noteholders“).
The Corporation and Noteholders representing 84.5% of the outstanding Notes (the “Forbearing Holders“) have entered into a long-term forbearance agreement in respect of the Notes (the “Agreement“). Noteholders representing a further 11.5% of the outstanding Notes are expected to sign onto the Agreement on Monday, September 12, 2016 (Calgary time) for a total of 96%. The principal terms of the Agreement include: (a) payment on October 17, 2016 of the yield maintenance premium payment due on August 1, 2016; (b) payment of the coupon interest accruing on the Notes and repurchase of US$22.5 million in principal amount of the Notes on February 1, 2017; (c) payment of the principal of the Notes and the coupon interest on the Notes on August 1, 2017; (d) payment of forbearance fees accruing at 2.50% on the principal amount of the Notes held by the Forbearing Holders; (e) payment of a fee equal to 7.298% of the outstanding principal amount of the Notes held by the Forbearing Holders on August 1, 2017 and proportionately smaller fees if the Notes are repurchased or redeemed prior to that date; (f) covenants relating to minimum liquidity to be maintained by the Corporation for specified periods; (g) board of director observation rights for certain significant Noteholders; (h) use of proceeds restrictions for the proceeds of any asset sales completed by the Corporation; (i) budget approval rights; and (j) requirements that the Corporation raise additional capital and provide additional security for the Notes.
The Board believes the entering into of the Agreement is in the best interests of the Corporation and its shareholders as a whole as the Agreement will provide the Corporation with additional time to repay or refinance the indebtedness owed by the Corporation to the Noteholders under the Notes. The Corporation is not aware that the Noteholders that are not a party to the Agreement intend to enforce their rights in respect of the Notes.
ABOUT SUNSHINE OILSANDS LTD.
The Corporation is a Calgary based public corporation listed on the Hong Kong Stock Exchange since March 1, 2012. The Corporation is focused on the development of its significant holdings of oil sands leases in the Athabasca oil sands region. The Corporation owns interests in approximately one million acres of oil sands and petroleum and natural gas leases in the Athabasca region. The Corporation is currently focused on executing milestone undertakings in the West Ells project area. West Ells has an initial production target rate of 5,000 barrels per day.