Pine Cliff Energy Ltd. Announces Borrowing Base Redetermination, Closing of a Private Placement and Increase and Extension of Insider Subordinated Debt
CALGARY, Alberta, July 13, 2018 (GLOBE NEWSWIRE) -- Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company”) (TSX:PNE) is pleased to announce that a banking
syndicate of Canadian Financial Institutions (the “Syndicate”) has completed the semi-annual borrowing base redetermination and has renewed the credit facility for a period of
one year. In addition, Pine Cliff has closed a private placement of units ("Units") for gross proceeds of $19.0 million (the "Private Placement") and increased
and extended the subordinated debt with insiders of the Company totaling $12.0 million (the “Insider Debt”).
Borrowing Base Redetermination
The Company has entered into an Amended and Restated Credit Agreement with the Syndicate for an $11.0 million revolving credit facility, consisting of a $6.0 million revolving syndicated facility and a $5.0 million revolving operating facility (the “Credit Facility”). The Credit Facility has a 364 day revolving period maturing July 27, 2019 and if it is not renewed, will convert to a 1 day term loan due on July 28, 2019. Borrowing under the Credit Facility bears interest at the Canadian prime rate plus 1.5% to 4.0%, or bankers’ acceptance rates plus 2.5% to 5.0%, depending in each case on the ratio of consolidated debt to EBITDA, plus applicable standby fees. The next date for Pine Cliff’s borrowing base redetermination will be November 30, 2018. Following the Private Placement and the increase in the Insider Debt, Pine Cliff is undrawn on the Credit Facility other than approximately $2.0 million in letters of credit and has approximately $5.0 million cash on hand.
In conjunction with the Credit Facility renewal, Pine Cliff completed a private placement of an aggregate 19,000 Units to Alberta Investment Management Corporation ("AIMCo"), on behalf of certain of its clients, at a price of $1,000 per Unit for aggregate gross proceeds of $19.0 million. Each Unit is comprised of: (i) one promissory note (a "Note") with a par value of $1,000 per Note and bearing interest at 7.05% per annum, which is payable semi-annually; and (ii) 150 common share purchase warrants ("Warrants"). The proceeds from the Private Placement were used to pay down the bank indebtedness of the Company and to provide additional working capital.