Canadian Energy Services & Technology has closed its previously announced "bought-deal" private placement financing (the "Offering"). Pursuant to the Offering, CESTC issued a total of 2,905,000 Subscription Receipts at $15.50 per Subscription Receipt for gross proceeds of $45,027,500. The financing was completed through an underwriting syndicate led by Cormark Securities Inc. and including Thomas Weisel Partners Canada Inc., FirstEnergy Capital Corp., RBC Capital Markets, Wellington West Capital Markets Inc., HSBC Securities (Canada) Inc., and Paradigm Capital Corp. (collectively, the "Underwriters").
The proceeds of the Offering (the "Escrowed Funds") were released to CESTC upon the satisfaction of the escrow release conditions, including closing of the acquisition of certain assets from Fluids Management II, Ltd. (the "FMI Acquisition") and obtaining shareholder approval to the issuance of the Common Shares underlying the Subscription Receipts (the "Escrow Release Conditions").
Each Subscription Receipt is exercisable by the holder thereof at any time following the date on which the Escrow Release Conditions were satisfied (the "Escrow Release Date") and each unexercised Subscription Receipt shall be deemed to be exercised automatically (for no further consideration and with no further action on the part of the holder thereof) into one Common Share, subject to adjustment in certain events, upon: (a) the earlier of: (i) the date that is four months and one day following the closing date of the Offering; and (ii) the third business day after a receipt is issued for a (final) prospectus by the securities regulatory authorities (the "Receipt") in each of the provinces of Canada where Subscription Receipts were issued and sold qualifying the distribution of the Common Shares to be issued upon the exercise of the Subscription Receipts.
CESTC has also agreed to use its commercially reasonable efforts to file and obtain the Receipt in each of the provinces of Canada where Subscription Receipts are issued and sold on or before the date that is 60 days after the closing of the Offering (the "Prospectus Deadline Date"). If the Receipt is not issued by the Prospectus Deadline Date, each holder of Subscription Receipts shall receive 1.1 Common Shares for each Subscription Receipt held.
The net proceeds of the Offering will be used by CESTC to repay indebtedness incurred in connection with the FMI Acquisition, including the US $40 million drawn on the previously announced bank financing to initially finance the cash portion of the purchase price of the FMI Acquisition, pay the expenses related to the Offering and general corporate purposes.
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