CALGARY, ALBERTA–(Marketwired – Aug. 14, 2017) – Birchcliff Energy Ltd. (“Birchcliff”) (TSX:BIR) announces that it does not intend to exercise its right to redeem its Cumulative Redeemable Preferred Shares, Series A (the “Series A Shares“) on September 30, 2017. As a result, subject to certain conditions, the holders of Series A Shares have the right to choose one of the following options with regard to their Series A Shares:
(i) to retain any or all of their Series A Shares and continue to receive a fixed rate quarterly dividend; or
(ii) to convert, on a one-for-one basis, any or all of their Series A Shares into Cumulative Redeemable Preferred Shares, Series B (the “Series B Shares“) of Birchcliff and receive a floating rate quarterly dividend.
The dividend rate applicable to the Series A Shares for the five-year period commencing on September 30, 2017 to, but excluding, September 30, 2022 will equal the sum of the Government of Canada five-year bond yield on August 31, 2017 plus 6.83%. The dividend rate applicable to the Series B Shares for the three-month period commencing on September 30, 2017 to, but excluding, December 31, 2017 will equal the sum of the Government of Canada 90-day treasury bill rate on August 31, 2017 plus 6.83%. Both rates will be calculated according to the terms of the Series A Shares and the Series B Shares as described in the final short form prospectus of Birchcliff dated July 30, 2012 (the “Prospectus“) and announced by way of a news release on August 31, 2017.
The Series A Shares are issued in “book-entry” form and must be purchased or transferred through a participant in the CDS depository service (a “CDS Participant“). All rights of the holders of Series A Shares must be exercised through CDS or the CDS Participant through which the Series A Shares are held. Beneficial owners of Series A Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is 5:00 p.m. (Toronto time) on September 15, 2017. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps. Holders of Series A Shares who do not exercise the right of conversion by this deadline will continue to hold Series A Shares with the new fixed rate quarterly dividend.
The foregoing conversion to the Series B Shares is subject to the conditions that:
(i) if Birchcliff determines that there would be less than 250,000 Series A Shares outstanding after September 30, 2017, then all of the remaining Series A Shares will automatically be converted into Series B Shares on a one-for-one basis on September 30, 2017; and
(ii) if Birchcliff determines that there would be less than 250,000 Series B Shares outstanding after September 30, 2017, then no Series A Shares will be converted into Series B Shares.
In either case, Birchcliff will issue a news release to that effect on or before September 22, 2017.
Subject to the terms and conditions of the Series A and Series B Shares and Birchcliff’s right to redeem such shares, holders of the Series A Shares and the Series B Shares will have the opportunity to convert their shares again on September 30, 2022, and every five years thereafter as long as the Series A Shares and Series B Shares remain outstanding.
For more information on the terms of and the risks associated with an investment in the Series A Shares and the Series B Shares, please see the Prospectus which is available on sedar.com.