CALGARY, ALBERTA–(Marketwired – April 1, 2016) – Anderson Energy Inc. (the “Company”) (TSX:AXL) announces that at a meeting today, the holders of the 7.25% Series B convertible unsecured subordinated debentures due June 30, 2017 (the “Series B Debentures”) voted on and passed an extraordinary resolution pursuant to which all of the Series B Debentures ($46.0 million) and the interest that would otherwise accrue on the Series B Debentures to June 30, 2016 ($1.67 million) will be settled and all claims of the debentureholders thereunder will be extinguished in exchange for approximately 8.428 billion common shares in the capital of Anderson (the “Exchange Transaction”). Debentureholders voted 88.33% in favour of the Exchange Transaction, with 53.42% of the Series B Debentures being voted.
The closing of the Exchange Transaction is subject to certain conditions, as more particularly described in the management information circular dated March 8, 2016 that was furnished in connection with the meeting. Closing is expected to occur by April 8, 2016.
Following the closing of the Exchange Transaction, Anderson will have positive working capital, no debt and approximately 17.772 billion outstanding common shares. The Company plans to propose a special resolution to approve a share consolidation at an annual and special meeting of shareholders to be held on May 16, 2016 at 9:00 a.m. (MT) at the Westwinds Conference Room, 2nd Floor Selkirk House, 555 4th Avenue S.W., Calgary, AB. The Board of Directors intends to recommend a share consolidation ratio of 1,000 to one. The share consolidation is subject to TSX approval.
The purpose of the doing a share consolidation is to reduce the number of outstanding shares in order to improve the trading liquidity of the common shares.
- More liquidity will make it easier for existing shareholders to sell and new shareholders to buy the shares when they want to.
- More liquidity provides better support for the overall market capitalization of the Company, which will help the Company in negotiations with other industry participants (e.g. potential sale, merger or financing opportunities).
- A share price similar to our peers will allow for better peer comparisons.
- A higher share price will encourage institutional investors and investments funds to invest in the Company, who may be reluctant or prohibited from investing in stocks trading below $1.00 per share.
- Theoretically, a share consolidation should not change the value to the shareholder. As the number of shares decrease, the value per share should increase by a corresponding amount. However, there may be some initial market volatility and there may be downward pressure as the market settles on a value for the common shares. Ultimately, the trading price should reflect the underlying value of the Company.
We encourage investors to review our recently released 2015 year end results, where the Company outlines its significant Cardium light oil horizontal potential opportunities and its emerging position in a medium depth Duvernay light oil horizontal project.