CALGARY, July 15, 2016 /CNW/ – (TSX: TBE) – Twin Butte Energy Ltd. (“Twin Butte” or the “Company“) is pleased to announce that it has mailed its Management Information Circular and related voting materials to Twin Butte shareholders and debentureholders (collectively, the “Twin Butte Securityholders“) in connection with the annual and special meeting to be held on August 10, 2016 (the “Meeting“). At the Meeting, Twin Butte Securityholders will be asked to, among other things, approve the plan of arrangement as initially announced on June 24, 2016 (the “Arrangement“) in respect of Twin Butte and the Twin Butte Securityholders and involving Reignwood Resources Holding Pte. Ltd. (the “Purchaser“) and Reignwood Resources Trading UK Limited (the “Acquiror“). Closing of the Arrangement remains on track to occur in mid-August 2016. Copies of the meeting materials mailed to the Twin Butte Securityholders have been filed on Twin Butte’s SEDAR profile and are available for viewing at www.sedar.com and www.twinbutteenergy.com.
Details of the Arrangement
Pursuant to the Arrangement, the Purchaser will, indirectly through its wholly owned subsidiary (the Acquiror), acquire: (i) all of the outstanding common shares of Twin Butte for cash consideration of $0.06 per share; and (ii) all of the outstanding 6.25% convertible unsecured subordinated debentures due December 31, 2018 of Twin Butte for cash consideration of $140 per $1,000 principal amount of debentures, plus accrued and unpaid interest thereon. Assuming the Arrangement closes on or about August 15, 2016, the accrued and unpaid interest payable on the debentures would be approximately $38.87 per $1,000. This includes the deferred semi-annual interest payment that was payable on June 30, 2016.
Board Recommends Securityholders Vote in Favour of the Arrangement
After an extensive review of the Company’s strategic and financial options, the board of directors of Twin Butte has unanimously: (i) determined that the Arrangement is in the best interests of Twin Butte and the Twin Butte Securityholders; (ii) resolved to recommend that Twin Butte Securityholders vote in favor of the Arrangement; and (iii) determined that the consideration to be received by Twin Butte Securityholders pursuant to the Arrangement is fair to the Twin Butte Securityholders.
The board of directors of Twin Butte UNANIMOUSLY recommends that the Twin Butte Securityholders vote “FOR” the Arrangement.
Securityholder Approval is Important – Vote Today
The Arrangement provides certainty of value and near-term liquidity to Twin Butte Securityholders in a challenging commodity price environment. If the Twin Butte Securityholders do not approve the Arrangement, the Purchaser (and the Company) has the right to terminate the arrangement agreement which would trigger an event of default under the Company’s credit facilities. Such an event of default under the credit facilities would allow the bank syndicate to accelerate the repayment of the Company’s outstanding bank debt. In such event, the lenders likely course of action would be to enforce their security by appointing a receiver to liquidate the Company’s assets and manage the Company’s affairs, which could result in the Twin Butte Securityholders (including debentureholders) receiving no consideration for their securities. Twin Butte Securityholders may vote by following the instructions found on their form of proxy or voting instruction form.
About Twin Butte
Twin Butte Energy Ltd. is a value oriented intermediate producer with a deep, low risk, drilling inventory focused on medium and heavy oil reservoirs. The common shares of Twin Butte are listed on the TSX under the symbol “TBE” and the debentures are listed on the TSX under the symbol “TBE.DB”.