Just Energy receives final court approval to sue
Final court order received for recapitalization
Strong interest in the stock option leads to approximately C $ 52 million receivables from eligible securityholders, with the guarantors responsible for approximately C $ 48 million
Closing of the plan of arrangement scheduled for or around September 16, 2020
TORONTO, Sep 03, 2020 (GLOBE NEWSWIRE) – Just Energy Group Inc. (“Just Energy” or the “Company”) (TSX: JE; NYSE: JE), a retail energy supplier specializing in electricity and natural gas and bringing energy efficient solutions and renewable energy options to customers, today announced that it has received final court approval required to complete the Company’s recapitalization plan (the “Recapitalization” ) and subscriptions totaling approximately C $ 52 million through the share purchase option included in its Recapitalization, with the remaining C $ 48 million to be provided by the supporting parties.
The recapitalization is being implemented through a plan of arrangement (the “Plan of Arrangement”) and earlier today, Just Energy obtained the final order from the Ontario Superior Court of Justice authorizing the implementation of the plan of arrangement. The Company expects the plan of arrangement to end on or around September 16, 2020, pending receipt of regulatory approvals.
The recapitalization is part of a comprehensive plan to strengthen and reduce business risk and position Just Energy for sustainable growth as an independent industry leader. The recapitalization significantly improves Just Energy’s financial flexibility through an injection of cash from its fundraising and reduces net debt and preferred shares by approximately C $ 520 million.
“The implementation of our recapitalization plan is moving rapidly following today’s decision,” said Scott Gahn, President and CEO of Just Energy. “With our judicial approvals now received, we are focused on running our business, maintaining our improved financial position and ensuring the future success of Just Energy. ”
Stock subscription option
As part of the recapitalization plan, holders of the term loan, euro bond, convertible subordinated debentures, preferred shares and existing ordinary shares of Just Energy as of July 23, 2020 were entitled to subscribe for ordinary shares. at a price per share of C $ 3,412.
The stock option received interest from all classes of securities, with subscriptions totaling 15,174,950 common shares, which will result in cash proceeds for Just Energy of approximately C $ 52 million. In accordance with previously announced support commitments, the supporting parties have agreed to acquire the remaining common shares unsubscribed by eligible holders under the share subscription option, totaling 14,137,580 common shares, on a post-requisite basis. -consolidation. The total proceeds from the stock option are C $ 100 million and will be used to reduce debt and for general corporate purposes.
Following completion of the Recapitalization, the Company’s main shareholder will be a group of related investment entities composed of OCII LVS XIV LP, LVS III SPE XV LP, HVS XVI LLC and TOCU XVII LLC which will collectively own 13,872,207 common shares of Just Energy, representing approximately 29% of the issued and outstanding common shares. Of this amount, OCII LVS XIV LP will hold 8,323,327 ordinary shares, representing approximately 17% of the issued and outstanding ordinary shares. The aforementioned ordinary shares will be acquired as part of the recapitalization, including due to the guarantee commitments provided by these investment entities. These investment entities are also lenders to the Company under an amended and restated term loan agreement which was entered into in connection with the recapitalization.
Consolidation of ordinary shares
The Company confirms today that the previously announced consolidation of its common shares on a 33 to 1 basis (the “Combination”) is expected to come into effect on or around September 16, 2020. The common shares will begin trading on the Exchange from New York. (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) after the Combination at the opening of trading on September 17, 2020.
Exchange and delisting of preferred shares
Just Energy further confirms today that its previously announced exchange (the “Preferred Share Exchange”) of all outstanding 8.50% Cumulative Fixed Rate Perpetual Redeemable Preferred Shares (TSX: JE.PR .U) (NYSE: JE. PR.A) (the “preferred shares) into new ordinary shares, on the basis of one preferred share for 0.33387132 new ordinary shares (on a post-Combination basis), is expected to take effect on or about September 16, 2020. Upon completion of the preferred share exchange, the preferred shares will be delisted from the NYSE and TSX and the delisting will take effect prior to or upon opening of trading on September 17, 2020.
Exchange and delisting of convertible subordinated debentures
Just Energy further confirms today that its previously announced exchange (the “Convertible Debentures Exchange”) of all outstanding 6.75% unsecured convertible senior subordinated debentures due March 31, 2023 (TSX: JE .DB.D) and $ 160 million convertible at 6.75% unsecured senior subordinated debentures due December 31, 2021 (TSX: JE.DB.C) into new common shares, based on 35.920689 new common shares (on a post-consolidation basis) for every $ 1,000 principal amount of subordinated convertible debentures, is expected to become effective on or about September 16, 2020. At the close of the Convertible Debenture Exchange, the Debentures Subordinated Convertibles will be delisted from the TSX and the delisting will be effective before or at the opening of trading on September 17, 2020.
Fractional Common Shares will not be issued in connection with the Consolidation, Exchange of Preferred Shares or Exchange of Convertible Debentures and any fraction will be rounded down to the next whole number of Common Shares.
Just Energy has reached an agreement in principle to settle the litigation related to the acquisition of Filter Group Inc. in 2018, with the release of any resulting claims. Under the proposed settlement, Filter Group shareholders will receive a total of $ 1.8 million in cash and 429,958 shares, issued upon the implementation of the recapitalization.
An amended version of the plan of arrangement, reflecting the settlement, will be filed on SEDAR at www.sedar.com.
About Just Energy Group Inc.
Just Energy is a consumer business focused on basic needs, including health and well-being for electricity and natural gas, such as water quality and filtration devices; and the conservation of public services, providing consumers with energy efficient solutions and renewable energy options. Currently present in the United States and Canada, Just Energy serves residential and commercial customers. Just Energy is the parent company of Amigo Energy, EdgePower Inc., Filter Group Inc., Hudson Energy, Interactive Energy Group, Tara Energy and TerraPass. Visit https://investors.justenergy.com/ to learn more. Find us also on Facebook and follow us on Twitter.
This press release may contain forward-looking statements. These statements are based on current expectations which involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These statements are based on current expectations which involve several risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, risks associated with raising new equity and swapping debt; the proposed recapitalization transaction resulting in a financially stronger Company; reduce the Company’s existing debt and interest expense (including their amounts); proceedings under the CBCA; the implementation of a plan of arrangement; the issuance of new shares; the allocation of any new share capital; meet certain obligations in connection with a proposed recapitalization transaction; risks associated with the proposed recapitalization transaction, including the inability to complete a proposed recapitalization transaction or to complete a proposed recapitalization transaction in a timely or efficient manner; failure to reduce Company debt and / or interest payments, CBCA proceedings; the issuance and allotment of new shares, including the dilution of the outstanding common shares of the Company; the value of existing equity following the completion of a recapitalization; the impact of the evolution of the COVID-19 pandemic on the Company’s business, operations and sales; dependence on suppliers; uncertainties relating to the ultimate spread, severity and duration of COVID-19 and the related negative effects on the economies and financial markets of the countries in which the Company operates; the Company’s ability to successfully implement its business continuity plans with respect to the COVID-19 pandemic; the Company’s ability to access sufficient capital to provide liquidity to manage its cash requirements; general economic, business and market conditions; management’s ability to execute its business plan; customer consumption levels of natural gas and electricity; extreme weather conditions; client additions and renewals rate; customer credit risk; customer attrition rate; fluctuations in the prices of natural gas and electricity; interest and exchange rates; actions taken by government authorities, including regulation of energy marketing; tax increases and changes in government regulations and incentive programs; changes in regulatory regimes; the results of litigation and decisions of regulatory authorities; competetion; the performance of the companies acquired and the dependence on certain suppliers. Additional information on these and other factors that could affect the business, financial results or dividend levels of Just Energy is included in Just Energy’s annual information form and other reports filed with Canadian authorities in Canada. securities and accessible on the SEDAR website at www.sedar.com on the United States Securities and Exchange Commission website at www.sec.gov or through the Just Energy website at www.justenergygroup.com.
Neither the Toronto Stock Exchange nor the New York Stock Exchange has approved or disapproved of the information contained in this document.
FOR MORE INFORMATION, PLEASE CONTACT:
Telephone: (617) 982-0475
Source: Just Energy Group Inc.