Press release from CNW Group
Petrowest Energy Services Trust announces stand-by purchase agreement and update on refinancing of credit facility
Wednesday, May 12, 2010
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CALGARY, May 12 /CNW/ - Petrowest Energy Services Trust (TSX: PRW.UN) (the "Trust") announced today that it has entered into a stand-by purchase agreement (the "Stand-by Agreement") in connection with its previously announced rights offering (the "Offering"). The Trust has entered into the Stand-by Agreement with certain individuals, some of whom are managers of various operational divisions of the Trust (collectively, the "Stand-by Purchasers"). Pursuant to the Stand-by Agreement, the Stand-by Purchasers have agreed to purchase up to $7.5 million of trust units of the Trust ("Trust Units") which are not otherwise subscribed for under the Offering. A preliminary prospectus was filed in respect of the Offering on April 30, 2010. The Stand-by Agreement is subject to certain terms and conditions; see the full text of the agreement available on SEDAR at www.sedar.com.
The Offering remains subject to regulatory approval, including the receipt for a final prospectus relating to the Offering and that of The Toronto Stock Exchange. The Offering is conditional upon the entering into of an agreement by the Trust with the Lenders (as defined below) in respect of the Secured Facilities (as defined below) the effectiveness of which will be subject to completion of the Offering.
The Trust also announced today that it has substantially concluded negotiations with respect to the amendments to its existing secured credit facilities with a lending syndicate of Canadian banks and other financial institutions (collectively, the "Lenders"). These amendments remain subject to final approval by the Lenders and the execution of an amended and restated credit agreement. The Trust expects that such amended credit facilities (the "Secured Facilities") will be in an initial aggregate principal amount of $70,000,000, consisting of a revolving credit facility in the principal amount of $63,000,000 and a working capital facility in the principal amount of $7,000,000. Failure to raise proceeds of $7.5 million under the Offering is expected to be an event of default under the Secured Facilities.
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "achievable," "believe," "expect," "estimate," "plan," "intend," "project," "may," "should", "could", "predict", "may," "will," or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements and information are based on Petrowest's current beliefs as well as assumptions made by and information currently available to Petrowest concerning anticipated business performance. Although management of Petrowest considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking statements are subject to many external variables that are beyond Petrowest's control, such as fluctuating prices for crude oil and natural gas, changes in drilling activity, and general local and global economic, political, business and weather conditions. If any of these, or other uncertainties, materialize the actual results of Petrowest may vary materially from those expected.
For further information: Ralph Hesje, President and CEO, or Lloyd A. Wiggins, Chief Financial Officer, at (403) 237-0881 or firstname.lastname@example.org