Toronto Stock Exchange: SCS
Common Shares: 84,121,297
CALGARY, May 13, 2013 /CNW/ - Second Wave Petroleum Inc. (TSX:SCS)
("Second Wave" or the "Company") announces completion of its previously
announced debenture financing, pursuant to which it has issued to
Brookfield Bridge Lending Fund Inc. ("Brookfield"), the Company's
controlling shareholder, a $17.5 million principal amount 7.5% secured
convertible debenture (the "Debenture") for net proceeds of $17,325,000
after payment of the 1% commitment fee. The Debenture has a maturity
date of May 13, 2016 and is convertible by the holder into common
shares of Second Wave at a conversion price of $0.25 per share, subject
to customary anti-dilution adjustments.
In connection with the Debenture financing and immediate repayment of
$5.0 million from the net proceeds, the Company's senior lender agreed
to temporarily forbear from exercising enforcement rights in respect of
its $90 million operating loan for a two-month period. The forbearance
arrangements require further efforts by Second Wave to address its
continuing borrowing base shortfall. Brookfield has similarly agreed
to forbear in respect of its existing $15 million secured term loan to
the Company due June 14, 2013, for so long as the senior lender
forbearance remains in effect.
In connection with its ongoing consideration of the previously announced
non-binding proposal from Brookfield to privatize the Company at a cash
price of $0.30 per share, a special committee of independent directors
of Second Wave (the "Special Committee") is supervising the preparation
of a formal valuation of Second Wave by Peters & Co. Limited, as
independent valuator, pursuant to applicable securities laws. If the
proposal proceeds, it is expected that the going private transaction
would be effected through an arrangement under the Business Corporations Act (Alberta) requiring shareholder approval. Although the Special
Committee's evaluation of the Brookfield proposal continues and no
definitive agreement has been entered into regarding a going private
transaction as contemplated thereby, in light of lender forbearance
arrangements and in order to accommodate the possibility of a special
meeting of shareholders during the forbearance period should a
definitive agreement be reached, the Company will not proceed with its
annual meeting as originally planned and has instead initiated
procedures necessary to hold a special meeting of shareholders at the
end of June. At this meeting, Second Wave's shareholders will consider
any necessary items of annual business and, if the Brookfield
privatization proposal proceeds, the going private transaction.
There can be no assurance that the Brookfield going private proposal
will become binding, or that the transaction contemplated thereby or
any other transaction will proceed or be recommended by the Special
Committee or board of directors, or that the temporary forbearance
arrangements can be extended past July 2, 2013 if a going private
transaction, recapitalization or other transaction is not completed by
that time.
Second Wave will make a further announcement if and at such time as the
Brookfield proposal becomes binding. In the meantime, the Special
Committee will continue to evaluate the proposal with the assistance of
its independent financial and legal advisers, and provide direction to
the Company's management and advisers.
READER ADVISORIES
Forward-Looking Statements. This news release contains forward-looking statements as to the
Company's internal projections, expectations and beliefs relating to
future events or circumstances. Forward-looking statements are
typically (but not necessarily) identified by words such as
"anticipate", "believe", "budget", "estimate", "expect", "plan",
"intend", "potential", "may", "will", "should" or similar words
suggesting future outcomes. Although the Company believes that these
forward-looking statements are reasonable, undue reliance should not be
placed on them as they are subject to known and unknown risks and
uncertainties, many of which are beyond the Company's control.
Forward-looking statements are not guarantees of future outcomes. There
can be no assurance that the plans, intentions or expectations
contained in the forward-looking statements or upon which they are
based will in fact occur or be realized, and actual results may differ
from those expressed or implied in the forward-looking statements. The
difference may be material.
Second Wave is subject to the inherent risks associated with the
exploration, development, exploitation and production of oil and gas.
More particularly, material risk factors that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements contained in this news release include:
adverse changes in commodity prices, interest rates or currency
exchange rates; accessibility of capital when required and on
acceptable terms; lower than expected production of crude oil and
natural gas; production delays; lower than expected reserve volumes on
the Company's properties; increased operating costs; ability to attract
and retain qualified personnel or to secure drilling rigs and other
services on acceptable terms; competition for labour, equipment and
materials necessary to advance the Company's projects; unforeseen
engineering, environmental or geological problems; ability to obtain
all required regulatory approvals on a timely basis and on satisfactory
terms; and changes in laws and governmental regulations (including with
respect to taxes and royalties). This list is not exhaustive. Readers
should also review the risk factors described in other documents filed
by the Company from time to time with securities regulatory authorities
in Canada, including its most recent annual information form, copies of
which are available electronically at www.sedar.com and at www.secondwavepetroleum.com.
Specific forward-looking statements contained in this news release
include statements regarding: forbearance arrangements with the
Company's lenders; potential completion of a going private transaction
with Brookfield; and the holding of a special meeting of shareholders
at the end of June 2013. In making such forward-looking statements,
Second Wave has made various assumptions regarding, among other things:
the satisfaction of its lenders with recapitalization efforts; and the
ability to enter into a definitive agreement with Brookfield regarding
a going private transaction.
The forward-looking statements included herein are made as of the date
of this news release and Second Wave undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be
required by securities laws.
SOURCE: Second Wave Petroleum Inc.
