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After several years of litigation, Perpetual has entered into an agreement (the "Settlement Agreement") with the Trustee to resolve the Sequoia Litigation without any party admitting liability, wrongdoing or violation of law, regulations, public policy or fiduciary duties. A Special Committee of Perpetual's Board of Directors has determined that bringing closure to this long-standing contested litigation is in the best interests of all of Perpetual's stakeholders.
Pursuant to the Settlement Agreement, and subject to Court approval, the Company will make an aggregate payment of
The certainty brought by the execution of the Settlement Agreement, and subsequent Court approval, terminates what has been, and would otherwise continue to be, a lengthy litigation process and allows Perpetual to advance its business plans with significantly improved access to capital, affording the financial flexibility to pursue value enhancing opportunities. The Company and the Board of Directors are pleased to put this matter behind us and move forward to unlock the inherent value potential of its asset base.
To simplify its capital structure, Perpetual has fully repaid and cancelled its existing second lien term loan provided by
The Company has also provided notice for the early redemption of all of the $33.2 million aggregate principal amount of 8.75% senior secured third lien notes maturing
The redemption amount will be CDN
Holders of 2025 Senior Notes who make an irrevocable election to amend the terms of their 2025 Senior Notes are required to do so no later than two business days prior to the Redemption Date. These amendments provide the Company with continuation of committed capital and transactional flexibility including the right to convert all or a portion of the 2025 Senior Notes into common shares of the Company or other securities at its discretion at any time prior to the maturity date as well as to provide for the second lien security which is required in connection with the resolution of the Sequoia Litigation. Entities controlled or directed by the President and Chief Executive Officer, holding
The Company's existing first lien credit facility (the "Credit Facility") has been amended to provide for these matters which includes the first lien lenders' consent to resolve the Sequoia Litigation, conditional on completion of the Senior Notes redemption and Court approval. The borrowing base under the Credit Facility remains unchanged at
The 2025 Senior Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state of
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in
Certain information in this news release including management's assessment of future plans and operations may constitute forward-looking information or statements (together "forward-looking information") under applicable securities laws. The forward-looking information includes, without limitation, statements with respect to: the timing, terms, structure and benefits of the early redemption of the 2025 Senior Notes; the benefits of the resolution of the Sequoia Litigation including the ability of the Company to advance its business plans with significantly improved access to capital, affording the financial flexibility to pursue value enhancing opportunities and the ability to unlock the inherent value potential of its asset base; and Perpetual's business plan.
Forward-looking information is based on current expectations, estimates and projections that involve a number of known and unknown risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Perpetual and described in the forward-looking information contained in this news release. In particular and without limitation of the foregoing, material factors or assumptions on which the forward-looking information in this news release is based include: forecast commodity prices and other pricing assumptions; forecast production volumes based on business and market conditions; foreign exchange and interest rates; near-term pricing and continued volatility of the market including inflationary pressures; accounting estimates and judgments; future use and development of technology and associated expected future results; the ability to obtain regulatory approvals; the successful and timely implementation of capital projects; ability to generate sufficient cash flow to meet current and future obligations including those under the Settlement Agreement; the ability of Perpetual to obtain and retain qualified staff and equipment in a timely and cost-efficient manner, as applicable; the retention of key properties; forecast inflation, supply chain access and other assumptions inherent in Perpetual's current guidance and estimates; climate change; severe weather events (including wild fires); the continuance of existing tax, royalty, and regulatory regimes; the accuracy of the estimates of reserves volumes; ability to access and implement technology necessary to efficiently and effectively operate assets; the ongoing and future impact of pandemics (including COVID-19); the war in
Undue reliance should not be placed on forward-looking information, which is not a guarantee of performance and is subject to a number of risks or uncertainties, including without limitation those described herein and under "Risk Factors" in Perpetual's Annual Information Form and MD&A for the year ended
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