$50-million bought deal
Cardinal Energy arranges $50-million bought deal
2024-12-18 12:45 ET - News Release
Mr. Scott Ratushny reports
CARDINAL ENERGY LTD. ANNOUNCES $50 MILLION BOUGHT DEAL OFFERING OF SENIOR SUBORDINATED UNSECURED DEBENTURES AND COMMON SHARE PURCHASE WARRANTS
Cardinal Energy Ltd. has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, pursuant to which the underwriters have agreed to purchase for resale to the public, on a bought deal basis, 50,000 units of Cardinal for gross proceeds of approximately $50-million. Each unit will comprise of one senior subordinated unsecured debenture due March 31, 2030, with a par value of $1,000 each and 65 common share purchase warrants. The company has granted the underwriters an option to purchase up to an additional $10-million of units, such option to be exercised, in whole or in part, at the sole discretion of the underwriters at any time until two business days prior to the closing date, as defined herein. The offering is expected to close on or about Jan. 3, 2025.
Each warrant will entitle the holder to acquire one common share of the company from the company at a price of $7 per common share, representing a premium of approximately 12.4 per cent to the last trade on the Toronto Stock Exchange (TSX) on Dec. 17, 2024, for a period of three years following the closing date.
The company intends to use the net proceeds of the offering to repay outstanding indebtedness on its senior credit facility, to further complete its Reford thermal project, to accelerate the development of future thermal projects and for general corporate purposes.
The debentures will bear interest at a rate of 7.75 per cent per year, payable semi-annually in arrears on the last business day of March and September of each year, commencing on March 31, 2025. The first payment will include accrued and unpaid interest for the period from the closing date to, but excluding, March 31, 2025. The debentures will mature on March 31, 2030.
The debentures will not be redeemable by the company before March 31, 2028. On and after the first call date and prior to March 31, 2029, the debentures will be redeemable, in whole or in part, from time to time at the company's option at a redemption price equal to 103.875 per cent of the principal amount of the debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and after March 31, 2029, and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time to time at the company's option at par plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. The company shall provide not more than 60 days nor less than 30 days prior notice of redemption of the debentures. The company has the option to satisfy its obligations to repay the principal amount of and premium (if any) on the debentures due at redemption or on maturity of the debentures by issuing and delivering that number of freely tradeable common shares of the company to debentureholders in accordance with the terms of the debenture indenture that will govern the terms of the debentures.
The units will be distributed in all provinces of Canada (other than the province of Quebec) by way of a prospectus supplement to the company's base shelf prospectus dated March 28, 2024, and by private placement in the United States to qualified institutional buyers, pursuant to Rule 144A of the United States Securities Act of 1933.
Access to the base shelf prospectus, the prospectus supplement and any amendments to the documents are provided in accordance with securities legislation relating to procedures for providing access to a base shelf prospectus, a prospectus supplement and any amendment to the documents. The base shelf prospectus, the prospectus supplement (when filed) and any amendments to these documents may be accessed for free on SEDAR+. Alternatively, electronic or paper copies of the foregoing documents may be obtained, without charge, from CIBC Capital Markets, 161 Bay St., 5th floor, Toronto, Ont., M5J 2S8, or by telephone at 1-416-956-6378, or by e-mail at mailbox.canadianprospectus@cibc.com, by providing the contact with an e-mail address or address, as applicable. The offering is subject to customary regulatory approvals, including the approval of the TSX.