TSX: SHLE
CALGARY, May 24, 2018 /CNW/ - Source Energy Services Ltd.
(the "Company" or "Source") is pleased to announce that its
wholly-owned subsidiaries Source Energy Services Canada LP and
Source Energy Services Canada Holdings Ltd. have, pursuant to an
underwriting agreement entered into today, agreed to issue and sell
an additional $50 million aggregate
principal amount of 10.5% senior secured first lien notes due
December 15, 2021 (the "Notes") by
way of private placement (the "Private Placement") under the
indenture pursuant to which the same issuers previously issued
Notes on December 8, 2016. This
represents an upsize in the aggregate principal amount of the
additional Notes sold under the Private Placement from the
$40 million that the Company
previously announced. The additional Notes will be issued at
$1,057.50 per $1,000 principal amount which represents an
effective yield of 7.953% to 2020. Interest on the additional Notes
will be payable semi-annually in arrears in equal instalments on
June 15 and December 15 of each year with the first interest
payment commencing on June 15, 2018.
The additional Notes will form a single series with the previously
issued Notes. The single series Notes will carry a S&P rating
of B+ and a DBRS rating of B(high). The Private Placement is
expected to close on or about May 31,
2018, subject to customary closing conditions.
In addition, on May 18, 2018,
Source's existing credit facility was amended to, among other
things, increase availability for borrowings thereunder (subject to
certain conditions) from $70 million
to $88 million, reflecting an
increase in the amount permitted to be borrowed under such credit
facility in compliance with the indenture governing the Notes.
The net proceeds from the issuance of the additional Notes will
be used to initially repay drawn amounts under the Company's
existing credit facilities, which in turn may be redrawn for
general corporate purposes and to fund working capital and capital
expenditures.
Brad Thomson, Chief Executive
Officer of Source, stated, "I'm pleased with the amendments that
we've made to our credit facility and the issuance of additional
senior secured first lien notes. These modifications to our capital
structure provide Source with the financial flexibility to continue
to execute on growth opportunities that the Company sees on the
horizon."
BMO Capital Markets and Scotiabank are acting as joint
book-running managers for the Private Placement which also includes
AltaCorp Capital Inc., Cormark Securities Inc., Canaccord Genuity
Corp. and CIBC World Markets Inc. as co-managers.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Notes, nor shall there be any
sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction.
The Notes have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or the securities
laws of any other jurisdiction, and may not be offered or sold in
the United States absent
registration or an applicable exemption from registration
requirements. The Offering is being made exclusively to qualified
institutional buyers in the United
States pursuant to Rule 144A under the Securities Act, to
non-U.S. persons in transactions outside the United States pursuant to Regulation S
under the Securities Act and pursuant to certain prospectus
exemptions in Canada.
ABOUT SOURCE ENERGY SERVICES
Source is a fully integrated producer, supplier and distributer
of high quality Northern White frac sand primarily to the Western
Canadian Sedimentary Basin. Source provides its customers with a
full end-to-end solution through its Wisconsin mine assets, processing facilities,
unit train capable rail assets, strategically located terminal
network and "last mile" logistics capabilities. Source's full
service approach allows customers to rely on its logistics
capabilities to increase reliability of supply and to ensure the
timely delivery of their growing frac sand requirements. In
addition to its transload terminal network and in-basin storage
capabilities, Source has also developed Sahara, a proprietary
wellsite mobile sand storage and handling system.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
"forward-looking information" and "forward-looking statements"
(collectively, "forward-looking statements") within the
meaning of applicable Canadian securities laws regarding, without
limitation, the Company's expectations, intentions, plans and
beliefs, including information as to the future financial or
operating performance of Source. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"contemplates", "expects" or "does not expect", "is expected",
"budget", "goal", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes" or variations
of such words and phrases, or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved. Such forward-looking statements reflect
management's beliefs, estimates and opinions regarding Source's
future growth, results of operations, performance, and business
prospects and opportunities at the time such statements are made,
and Source takes no obligation to update forward-looking statements
if these beliefs, estimates and opinions or circumstances should
change. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by Source, are inherently subject to significant
business, economic, competitive, political and social uncertainties
and contingencies. Forward-looking statements are not guarantees of
future performance. In particular, this press release contains
forward-looking statements pertaining to, but not limited to, the
closing date for the Private Placement and the use of proceeds of
the Private Placement.
By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Source to differ materially from those anticipated
by Source and described in forward-looking statements.
With respect to forward-looking statements contained in this
press release, various assumptions have been made. A number of
factors, risks and uncertainties could cause results to differ
materially from those anticipated and described herein.
Although Source has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. The forward-looking statements
contained in this press release are expressly qualified by this
cautionary statement. Accordingly, readers should not place undue
reliance on forward-looking statements. These statements speak only
as of the date of this press release. Except as required by law,
neither the Company nor any of the underwriters undertakes any
obligation to publicly update or revise any forward-looking
statements.
SOURCE Source Energy Services
