CALGARY,
AB, Aug. 11, 2022 /CNW/ - CES Energy
Solutions Corp. ("CES" or the "Company") (TSX: CEU) (OTC:
CESDF) is pleased to announce that it has entered into support
agreements with certain holders (the "Consenting Noteholders") of
its 6.375% senior notes due October 21,
2024 (the "Notes") representing a majority in aggregate
principal amount of outstanding Notes, to consent to the amendment
(the "Amendment") of the trust indenture dated October 20, 2017, as supplemented, governing the
Notes (the "Indenture"). The Consenting Noteholders' consents will
be sufficient to enable the Company to implement the Amendment
without undertaking a more formal consent solicitation of all of
the holders of the Notes (the "Noteholders"), although all
Noteholders will be afforded the opportunity to consent should they
wish to do so.
The Amendment, when implemented, will permit the Company and any
of its restricted subsidiaries to incur indebtedness under any
credit facilities in an aggregate amount at any time outstanding,
not to exceed the greater of (a) $400 million or (b) 30% of
consolidated tangible assets (as defined in the Indenture) of the
Company, replacing the current limitations of the greater of (a)
$265 million or (b) 1.5x consolidated
cash flow (as defined in the Indenture) of the Company. The
increase in this permitted indebtedness is aligned with the
increased financial scale of the Company and the strength of its
balance sheet, thereby providing flexibility to support the current
and future liquidity requirements of the Company's growing
business.
"We are very pleased that the Consenting Noteholders have agreed
to support certain amendments to afford the Company financial
flexibility to continue executing our business model in this robust
environment as this is a clear vote of confidence in our strategic
plan. The existing Indenture was created in 2017, when CES
generated $1.0 billion in revenue
versus the $1.7 billion in revenue
implied by annualizing our Q2 2022 results. These increased revenue
levels necessitated an update to the Indenture to support the
potential future needs of our much larger Company. With this
incremental available liquidity, together with our record-setting
financial performance announced today, the Company is in an
enviable position to deliver on its strategic objectives and
generate greater shareholder value", said Ken Zinger, CEO of CES Energy Solutions.
Notwithstanding that a formal consent solicitation of
Noteholders will not be undertaken in respect of the Amendment, all
Noteholders will be afforded the opportunity to consent provided
that such consents are received by Computershare Trust Company of
Canada on or prior to 4:00 p.m. (Calgary time) on August
19, 2022. Regardless of whether a Noteholder provides
a consent, the Company intends to provide all Noteholders of record
as of August 8, 2022 with the same
consent fee of $10.00 for each
$1,000 principal amount of Notes,
conditional upon and payable following the implementation of the
Amendment. The payment date for the consent fee is expected
to be August 23, 2022. The
Amendment will be implemented pursuant to a fifth supplemental
indenture to the Indenture, a copy of which will be distributed to
all Noteholders.
About CES Energy Solutions Corp.
CES is a leading provider of technically advanced consumable
chemical solutions throughout the lifecycle of the oilfield. This
includes solutions at the drill-bit, at the point of completion and
stimulation, at the wellhead and pump-jack, and finally through to
the pipeline and midstream market. CES' business model is
relatively asset light and requires limited re-investment capital
to grow. As a result, CES has been able to capitalize on the
growing market demand for drilling fluids and production and
specialty chemicals in North
America while generating free cash flow.
Additional information about CES is available at www.sedar.com
or on the Company's website at www.cesenergysolutions.com.
Forward Looking Information
This press release contains certain forward-looking
statements and forward-looking information ("forward-looking
information") within the meaning of applicable Canadian securities
laws. Forward-looking information is often, but not always,
identified by the use of words such as "anticipate", "believe",
"plan", "intend", "objective", "continuous", "ongoing", "estimate",
"expect", "may", "will", "project", "should" or similar words
suggesting future outcomes. In particular, this press release
includes, without limitation, forward-looking information relating
to the Company's: expectations regarding the adoption of the
Amendment, the payment of a consent fee and the expected timing
thereof, the strength of the Company's balance sheet, the
achievement of the Company's strategic objectives, expectations
regarding revenue for 2022, and the generation of shareholder
value. CES believes the expectations reflected in such
forward-looking information are reasonable but no assurance can be
given that these expectations will prove to be correct and such
forward-looking information should not be unduly relied upon.
Forward-looking information is based on various assumptions. Those
assumptions are based on information currently available to CES.
Forward-looking information is not a guarantee of future
performance and involves a number of risks and uncertainties some
of which are described herein. Any forward-looking information is
made as of the date hereof and, except as required by law, CES
assumes no obligation to publicly update or revise such information
to reflect new information, subsequent or otherwise.
THE TORONTO
STOCK EXCHANGE HAS NOT REVIEWED
AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
SOURCE CES Energy Solutions Corp.