ENTREC Announces Proposal to Amend the Terms of Its 7.00% Convertible Unsecured Subordinated Debentures Due October 31, 2017

ACHESON, ALBERTA--(Marketwired - May 6, 2016) - ENTREC Corporation ("ENTREC" or the "Corporation") (TSX:ENT), an employee-owned heavy haul transportation and crane solutions provider, announced today that it will seek approval from holders of its 7.00% convertible unsecured subordinated debentures due October 31, 2017 (ENT.DB) (the "Debentures") to amend the terms of the Debentures at a meeting of the holders of the Debentures (the "Debentureholders") to be held on June 6, 2016 (the "Meeting").

The proposed amendments (the "Debenture Amendments") to the Debentures (as amended by the Debenture Amendments, the "Amended Debentures") consist of:

1. INCREASING the underlying coupon rate from 7.00% to 8.50% effective October 31, 2016 (being the commencement of the next interest rate accrual period);
2. DECREASING the conversion price from $2.60 to $1.00 per share of the Corporation;
3. EXTENDING the maturity date from October 31, 2017 to June 30, 2021;
4. PERMITTING the Corporation to redeem the Amended Debentures, in whole or in part, at any time up to June 30, 2021, at a price equal to the principal amount thereof plus accrued and unpaid interest to, but excluding the date of the redemption;
5. REMOVING the Corporation's ability to, upon the conversion of the Amended Debentures by a holder thereof, elect to pay the holder cash in an amount and at such time as determined in accordance with the Indenture; and
6. REMOVING the Corporation's ability to undertake any rights offering, issuance of securities, subdivision of the common shares of the Corporation, dividend or other distribution on the common shares of the Corporation or any other securities, capital reorganization, reclassification or any similar type of transaction in which (i) the number of securities to be issued, (ii) the price at which securities are to be issued, converted or exchanged, or (iii) any property or cash that is to be distributed or allocated, is in whole or in part based upon, determined in reference to, related to or a function of, directly or indirectly, (x) the exercise or potential exercise of the Common Share Redemption Right (as defined in the trust indenture governing the Debentures) or the Common Share Repayment Right (as defined in the trust indenture governing the Debentures), or (y) the Current Market Price (as defined in the trust indenture governing the Debentures) determined in connection with the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right.

Contingent on the approval of the Debenture Amendments, the Corporation will, on October 31, 2017, redeem on a pro rata basis $3,500,000 of the principal amount of Amended Debentures outstanding as at the close of business on October 31, 2017 (the "Partial Redemption"). The Partial Redemption will be for a cash payment equal to the principal amount thereof plus accrued and unpaid interest to, but excluding the date of the redemption.