Cenovus currently holds, indirectly through the Partnership, 50,000,000 Common Shares, representing approximately 24.7% of the issued and outstanding Common Shares and 15,000,000 purchase warrants exercisable at $2.00 per Common Share until December 2, 2023. Following the closing of the Offering, Cenovus will indirectly hold 25,000,000 Common Shares (21,250,000 Common Shares assuming full exercise of the over-allotment option), representing approximately 12.3% of the issued and outstanding Common Shares (10.5% assuming full exercise of the over-allotment option) and 15,000,000 warrants to purchase Common Shares. Assuming exercise of the warrants held by Cenovus, following closing of the Offering, Cenovus would indirectly hold 40,000,000 Common Shares (36,250,000 Common Shares assuming full exercise of the over-allotment option), representing approximately 18.4% of the issued and outstanding Common Shares (16.7% assuming full exercise of the over-allotment option).
Cenovus is selling the Common Shares as part of its plan to reduce net debt levels towards its $10 billion interim target and accelerate shareholder returns. Through its active development plan and early success, Headwater has accelerated the value generated from the Marten Hills asset and continues to progress its exploration program. The Offering will expand Headwater’s free-trading float and is expected to provide new and existing shareholders with enhanced trading liquidity.
The Common Shares will be offered by way of a short form prospectus qualifying them for distribution in all provinces of Canada, excluding Quebec. Private placement offerings in the United States will be made to “qualified institutional buyers” pursuant to Rule 144A of the United States Securities Act of 1933 and with certain accredited institutional investors under Regulation D. The Offering is expected to close on or about October 14, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary corporate and regulatory approvals, including the applicable securities regulatory authorities. No securities regulatory authority has either approved or disapproved of the contents of this news release.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.