Post by
kcac1 on Sep 12, 2024 7:14pm
Here is the Simple Circular coming with the Simple Form
This document is important and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult your investment dealer, stock broker, bank manager, lawyer or other professional advisor. This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful.
The Offer (as defined below) is not being made to Shareholders (as defined below) in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. This Offer has not been approved by any securities regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of the Offer or upon the adequacy of the information contained in this document. Any representation to the contrary is an offense.
For U.S. Shareholders: The Offer is made by a Canadian issuer, for its own Shares (as defined below), and while the Offer is subject to the disclosure requirements of the province of Alberta and the other provinces of Canada, U.S. Shareholders should be aware that these disclosure requirements are different from those of the United States. The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards and are subject to Canadian auditing and auditor independence standards, and thus are not comparable in all respects to financial statements of U.S. companies. The enforcement by U.S. Shareholders of civil liabilities under U.S. federal and state securities laws may be adversely affected by the fact that the Company is incorporated under the BCBCA (as defined below) and located in Canada, and that certain of its directors and officers are residents of Canada or other countries other than the United States.
September 11, 2024 FRONTERA ENERGY CORPORATION OFFER TO PURCHASE FOR CASH UP TO $40,500,000 IN VALUE OF ITS COMMON SHARES AT A PURCHASE PRICE OF $12.00 PER COMMON SHARE
Frontera Energy Corporation (the “Company”) hereby offers to its shareholders (“Shareholders”), upon the terms and subject to the conditions described herein, to purchase for cancellation up to 3,375,000 common shares of the Company (the “Shares”) at a purchase price of $12.00 per Share (the “Purchase Price”), for an aggregate purchase price not exceeding $40,500,000 (equivalent to US$30,000,000).
Only Shares will be taken up and purchased for cancellation pursuant to the Offer (as defined below). The offer by the Company is subject to the terms and conditions set forth in this offer to purchase (the “Offer to Purchase”), the accompanying issuer bid circular (the “Circular”), related letter of transmittal (the “Letter of Transmittal”) and notice of guaranteed delivery (the “Notice of Guaranteed Delivery”, and together with the Offer to Purchase, Circular and Letter of Transmittal, each as amended or supplemented from time to time, the “Offer”).
The Offer commences on the date hereof and expires at 5:00 p.m. (Eastern time) on October 17, 2024 unless withdrawn, extended or varied by the Company (the “Expiration Date”). The Offer is not conditional upon any minimum number of Shares being properly deposited under the Offer. The Offer is, however, subject to other conditions and the Company reserves the right, subject to applicable laws, to withdraw, extend or vary the Offer if, at any time prior to the payment of any Shares, certain events occur.
See Section 7 of the Offer to Purchase, “Certain Conditions of the Offer”. ii Each Shareholder who has properly deposited Shares and who has not withdrawn such Shares will receive the Purchase Price, payable in cash (subject to applicable withholding taxes, if any), for all Shares purchased upon the terms and subject to the conditions of the Offer, including the provisions relating to proration and the preferential acceptance of Odd Lots described herein.
The Purchase Price will be payable in Canadian dollars; however, Shareholders may elect to receive the Purchase Price in United States dollars as described in the Offer. The risk of any fluctuation in exchange rates, including risks relating to the particular date and time at which funds are converted, will be borne solely by the Shareholder. If the aggregate number of Shares validly tendered for purchase under the Offer is less than or equal to 3,375,000 Shares, the Company will, upon the terms and subject to the conditions of the Offer, purchase all Shares so deposited. If more than 3,375,000 Shares are tendered for purchase under the Offer, the tendered Shares will be purchased on a pro rata basis according to the number of Shares tendered (or deemed to be tendered) by the tendering Shareholders (with adjustments to avoid the purchase of fractional Shares, rounding down to the nearest whole number of Shares), except that Odd Lot tenders will not be subject to proration
. For the purposes of the foregoing, an “Odd Lot” tender is a tender by a Shareholder owning in the aggregate less than 100 Shares as of the close of business on the Expiration Date, who deposits all such Shares pursuant to the Offer prior to the Expiration Date and who checks the Odd Lots box in either the Letter of Transmittal or the Notice of Guaranteed Delivery. As set forth above, Odd Lots will be accepted for purchase under the Offer before any proration. Partial tenders will not qualify for this preference. This preference is not available to holders of 100 or more Shares even if holders have separate share certificates for fewer than 100 Shares or hold fewer than 100 Shares in different accounts. Odd Lot holders therefore have the opportunity to sell their Shares without incurring brokerage commissions or any Odd Lot discounts, each of which may be applicable on a sale of their Shares in a transaction on the Toronto Stock Exchange (the “TSX”).
All payments to Shareholders will be subject to a deduction of applicable withholding taxes. See Section 3 of the Offer to Purchase, “Number of Shares and Proration”. Certificates for Shares not purchased under the Offer (including Shares not purchased because of proration), or properly withdrawn before the Expiration Date, will be returned (in the case of certificates representing Shares all of which are not purchased) or replaced with new certificates or DRS advices representing the balance of Shares not purchased (in the case of certificates representing Shares of which less than all are purchased), promptly after the Expiration Date, termination of the Offer, or the date of withdrawal of the Shares, as applicable, without expense to the Shareholder.
In the case of Shares tendered through book-entry transfer, such Shares will be credited to the appropriate account, without expense to the Shareholder. As of September 3, 2024, there were 84,188,756 Shares issued and outstanding. Accordingly, a maximum of 3,375,000 Shares, or approximately 4.0% of the total number of issued and outstanding Shares will be taken up and paid for under the Offer. The Catalyst Capital Group Inc. (“Catalyst”) and Gramercy Funds Management LLC (“Gramercy” and, collectively with Catalyst, the “Principal Shareholders”) are the beneficial owners of, or exercise control or direction over, 34,775,609 and 11,300,032 Shares, respectively, which in the aggregate represent approximately 54.73% of all issued and outstanding Shares.
Each of Catalyst and Gramercy has advised the Company that their current intention is to deposit Shares pursuant to the Offer, however, their decision to participate in the Offer is subject to market conditions and other factors. Each of Catalyst and Gramercy reserves the right, without notice and for any or no reason, to change its investment decision at any time prior to the Expiration Date.
In addition, Orlando Cabrales Segovia, Chief Executive Officer and Director, Ren Roberto Burgos Diaz, Chief Financial Officer, Ivan Arevalo, Corporate Vice President, Operations, Alejandra Bonilla, General Counsel & Secretary, Renata Campagnaro, Corporate Vice President, Marketing, Logistics & Business Sustainability, Victor Vega, Corporate Vice President, Field Development, Reservoir Management & Exploration (the “Depositing D&Os”) have advised the Company that they intend to deposit an aggregate of 247,569 Shares under the Offer (representing approximately 0.29% of all issued and outstanding Shares).
The Shares are listed and posted for trading on the TSX under the symbol “FEC”. On August 6, 2024, the last full trading day prior to the date of announcement of the Company’s intention to make the Offer, the closing price of the Shares on the TSX was $7.25 per Share. In accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the Company has determined that: (i) a liquid market exists for the Shares, and (ii) it is reasonable to conclude that, following the completion of the Offer in accordance with its terms, there will be a market for holders of Shares who do not tender to the Offer that is not materially less liquid than the market that existed at the time of the making of the iii Offer.
In addition, while not required under securities laws, the board of directors of the Company (the “Board of Directors” or the “Board”) has obtained, on a voluntary basis, an opinion from BMO Nesbitt Burns Inc. (“BMO Capital Markets”), which is also serving as the Canadian dealer manager for the Offer (the “Dealer Manager”), that as at September 2, 2024, based on and subject to the qualifications, assumptions and limitations set out therein, (i) a liquid market for the Shares exists and (ii) it is reasonable to conclude that, following the completion of the Offer, there will be a market for holders of Shares who do not tender to the Offer that is not materially less liquid than the market that existed at the time of the making of the Offer (the “Liquidity Opinion”). A copy of the Liquidity Opinion is attached hereto as Schedule A. The summary of the Liquidity Opinion herein is qualified in its entirety by reference to the full text of the Liquidity Opinion. The Board of Directors urges Shareholders to read the Liquidity Opinion in its entirety. The Liquidity Opinion is not a recommendation as to whether or not Shareholders should tender or refrain from tendering any or all of such Shareholder’s Shares pursuant to the Offer.
The Board of Directors has approved the Offer. However, none of the Company, its Board of Directors, the Dealer Manager or the Depositary (as defined below) makes any recommendation to any Shareholder as to whether to deposit or refrain from depositing Shares under the Offer. Shareholders are urged to carefully evaluate all information in the Offer, consult their own financial, legal, investment and tax advisors and make their own decisions as to whether to deposit Shares under the Offer, and, if so, how many Shares to deposit.
Each of Catalyst and Gramercy has advised the Company that their current intention is to deposit Shares pursuant to the Offer, however, their decision to participate in the Offer is subject to market conditions and other factors. Each of Catalyst and Gramercy reserves the right, without notice and for any or no reason, to change its investment decision at any time prior to the Expiration Date. In addition, the Depositing D&Os are the only directors and officers that have advised the Company that they intend to deposit Shares under the Offer, and the Depositing D&Os have informed the Company that they intend to deposit, in the aggregate, 247,569 Shares under the Offer. See Section 3 “Purpose and Effect of the Offer”, Section 12 “Ownership of the Company’s Securities”, and Section 13 “Arrangements Concerning Securities of the Company” of the Circular. Shareholders should carefully consider the income tax consequences of having Shares being purchased under the Offer.
See Section 16 of the Circular, “Income Tax Considerations”. Shareholders wishing to deposit all or any portion of their Shares pursuant to the Offer must comply in all respects with the delivery procedures described herein. See Section 5 of the Offer to Purchase, “Procedure for Depositing Shares”. On November 16, 2023, the Company announced the renewal of its normal course issuer bid to repurchase for cancellation up to 3,949,454 of its Shares over the 12-month period commencing on November 21, 2023 and ending November 20, 2024. As of September 3, 2024, the Company has repurchased 1,552,100 Shares at a volume weighted average price of $8.21 per Share under the current normal course issuer bid. See Section 9 of the Circular, “Previous Purchases of Shares”.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER YOU SHOULD DEPOSIT OR REFRAIN FROM DEPOSITING SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN AS SET FORTH IN THIS OFFER. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
No Canadian, U.S. or foreign securities commission has approved or disapproved of this Offer or passed upon the merits or fairness of this Offer or passed upon the adequacy or accuracy of the information contained in this Offer. Any representation to the contrary is a criminal offense. Any questions or requests for information regarding the Offer should be directed to Computershare Investor Services Inc. (the “Depositary”) or the Dealer Manager at the addresses and telephone numbers of the Depositary and the Dealer Manager set forth on the last page of the accompanying Circular.
The Offer will expire at 5:00 p.m. (Eastern time) on October 17, 2024, unless extended or withdrawn. The Depositary for the Offer is: The Dealer Manager for the Offer is: Computershare Investor Services Inc. BMO Nesbitt Burns Inc. iv Regular Mail: Computershare Investor Services Inc. P.O. Box 7021 31 Adelaide Street East Toronto, ON M5C 3H2 Attention: Corporate Actions First Canadian Place 100 King St. W. Toronto, Ontario M5X 1H3 Email: FronteraSIB@bmo.com Telephone (outside North America): 1 (514) 982-7555 Toll Free (within North America): 1 (800) 564-6253 Email: corporateactions@computershare.com Registered Mail, Hand or Courier 100 University Avenue 8th Floor Toronto, ON M5J 2Y1 Attention: Corporate Actions