CALGARY, ALBERTA–(Marketwired – May 24, 2016) – Gibson Energy Inc. (“Gibsons” or the “Company”) (TSX:GEI) is pleased to announce that it has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets and RBC Capital Markets pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 12,950,000 common shares (“Common Shares”) at a price of $15.45 per Common Share, for gross proceeds of approximately $200 million and $100 million aggregate principal amount of unsecured subordinated convertible debentures (the “Debentures”) at a price of $1,000 per debenture, for aggregate gross proceeds of approximately $300 million (the “Offering”).
The Debentures, will bear interest at a rate of 5.25% per annum, payable semi-annually on July 15 and January 15 in each year commencing January 15, 2017. The January 15, 2017 interest payment will represent accrued interest for the period from the Closing Date (as defined below) to January 15, 2017. The Debentures will mature on July 15, 2021 and may be redeemed by the Company, in certain circumstances, on or after July 15, 2019. The Debentures will be convertible at the holder’s option into Common Shares at any time prior to the earlier of the Maturity Date and the business day immediately preceding the date fixed for redemption by the Company at a conversion price of $21.65 per Share (the “Conversion Price”), being a ratio of approximately 46.1894 Shares per $1,000 principal amount of Debentures. The Debentures will be subordinated to the Company’s senior indebtedness.
The underwriters will also have an option (the “Over-Allotment Option”) to purchase up to an additional 1,942,500 Common Shares issued under the Offering at a price of $15.45 per Common Share to cover over-allotments and for market stabilization purposes, exercisable in whole or in part at any time, and from time to time, until 30 days after the Closing Date of the Offering. The maximum aggregate gross proceeds that could be raised under the Offering is approximately $330 million should the Over-Allotment Option be exercised in full.
The net proceeds of the Offering will be used to initially repay bank indebtedness, fund the Company’s previously announced 2016 and 2017 growth capital program, and the potential expansion thereof, and for general corporate purposes.
The Offering will be completed by way of a prospectus supplement to Gibsons’ short form base shelf prospectus dated April 13, 2015 (collectively, the “prospectus”) in each of the provinces of Canada and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended. The Offering is made only by the prospectus. The prospectus will contain important detailed information about the securities being offered. Investors should read the prospectus before making an investment decision. The prospectus will be available free of charge on SEDAR at www.sedar.com or from the underwriters named in the prospectus. Potential investors may request the prospectus from BMO Capital Markets, Brampton Distribution Centre C/O The Data Group of Companies, 9195 Torbram Road, Brampton, Ontario, L6S 6H2 by telephone at 905-791-3151 Ext 4020 or by email at email@example.com or RBC Capital Markets, Attention: Distribution Centre, RBC Wellington Square, 8th Floor, 180 Wellington St. West, Toronto, Ontario M5J 0C2 (Fax: 416-313-6066).
Closing is expected to occur on or about June 2, 2016 (the “Closing Date”), and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.
The Common Shares and Debentures have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements thereof. This news release shall not constitute an offer to sell, or the solicitation of any offer to buy, nor shall there be any sale of Common Shares or Debentures in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.