Calgary, Alberta – Bonavista Energy Corporation (TSX: BNP) (“Bonavista” or the “Company“) today announced that at the meetings (the “Meetings“) of holders (the “Senior Noteholders“) of the Company’s outstanding (i) 4.37% Notes due November 2, 2020; (ii) 4.25% Notes due October 25, 2021; (iii) 4.47% Notes due November 2, 2022; (iv) 3.68% Notes due May 23, 2023; (v) 4.09% Notes due May 23, 2023; (vi) 3.80% Notes due April 25, 2025; and (vii) 3.78% Notes due May 23, 2025 (collectively, the “Senior Notes“) and holders (the “Existing Shareholders“) of the Company’s common shares (the “Common Shares“) and exchangeable shares (the “Exchangeable Shares“) held today, the Senior Noteholders and Existing Shareholders approved the Company’s previously announced recapitalization transaction (the “Recapitalization Transaction“) to be implemented pursuant to a plan of arrangement (the “Plan of Arrangement“) under the Canada Business Corporations Act (the “CBCA“).
Approval of the Plan of Arrangement
At the Meetings, 100% of the votes cast by Senior Noteholders and 78.31% of the votes cast by Existing Shareholders were voted in favour of the Recapitalization Transaction.
In addition, the special resolution (the “Shareholders’ Cash Arrangement Resolution“) approving the option of having all Existing Shareholders, other than G2S2 Capital Inc. (“G2S2“), and its affiliates and associates, receive $0.05 in cash in exchange for each pre-consolidation Common Share under the Plan of Arrangement to be paid by G2S2, was passed by an affirmative vote of: (i) 74.58% of the votes cast in respect of the Shareholders’ Cash Arrangement Resolution by Existing Shareholders present in person or represented by proxy at the annual and special meeting of Existing Shareholders (the “Shareholders’ Meeting“); and (ii) 61.65% of the votes cast by Existing Shareholders present in person or represented by proxy at the Shareholders’ Meeting excluding the votes required to be excluded for majority of the minority approval at the Shareholders’ Meeting pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
Election of Directors
The six candidates nominated for election to Bonavista’s board of directors (the “Board of Directors“) as listed in the Company’s management information circular dated July 2, 2020 (the “Information Circular“) and voted upon at the Shareholders’ Meeting were elected by Existing Shareholders present or represented by proxy at the Shareholders’ Meeting. The voting results are as follows:
|Votes For||Votes Withheld|
|Keith A. MacPhail||95,051,689||76.96||28,455,500||23.04|
|George S. Armoyan||93,446,788||75.66||30,060,401||24.34|
|Ian S. Brown||96,635,923||78.24||26,871,266||21.76|
|David P. Carey||94,660,352||76.64||28,846,837||23.36|
|Ronald J. Poelzer||97,012,331||78.55||26,494,858||21.45|
|Jason E. Skehar||96,458,133||78.10||27,049,056||21.90|
As described in the Information Circular, pursuant to the Recapitalization Transaction, the composition and size of the Board of Directors on the effective date of the Recapitalization Transaction shall be acceptable to the Senior Noteholders holding not less than 66 2/3% of the aggregate principal amount of the Senior Notes held by all Senior Noteholders (the “Super Majority Consenting Noteholders“). Accordingly, pursuant to the Plan of Arrangement, certain of the directors of Bonavista at the time of the implementation of the Plan of Arrangement will resign, and the new directors determined by the Super Majority Consenting Noteholders pursuant to the Plan of Arrangement will be deemed to be appointed. The Company will provide a further update on these matters at the appropriate time in connection with implementation of the Recapitalization Transaction.
Shareholder Approval of Other Matters
In addition to the above, at the Shareholders’ Meeting all other resolutions described in the Information Circular were approved by the Existing Shareholders as follows: (i) the special resolution approving the continuance of Bonavista into the federal jurisdiction of Canada under the CBCA (the “Federal Continuance“) and ratifying the new by-laws of Bonavista upon completion of the Federal Continuance was approved by 78.98% of the votes cast by Existing Shareholders; (ii) the special resolution approving the continuance of Bonavista, following completion of the Plan of Arrangement and at the discretion of the Board of Directors, back into the Province of Alberta under the Business Corporations Act (Alberta) was approved by 79.21% of the votes cast by Existing Shareholders; and (iii) the ordinary resolution approving the appointment of KPMG LLP as the auditor of the Company was approved by 58.17% of the votes cast by Existing Shareholders.
The Company expects to complete the Federal Continuance prior to seeking approval of the Plan of Arrangement by the Court of Queen’s Bench of Alberta (the “Court“).
Court Approval and Implementation
The hearing to seek Court approval of the Plan of Arrangement is currently scheduled for 2:00 p.m. (MDT) on August 4, 2020, or such other date as may be set by the Court. Subject to obtaining Court approval of the Plan of Arrangement and the satisfaction or waiver of the other conditions to the implementation of the Plan of Arrangement, the Company is working to complete the Recapitalization Transaction on or about August 7, 2020.