ClearStream receives Support from Lenders
CALGARY, Alberta, June 03, 2020 (GLOBE NEWSWIRE) -- ClearStream Energy Services Inc. (“ClearStream”) (TSX: CSM) is pleased to announce that it has received support from each of its lenders to
assist it with managing through the disruptions to its business caused by the combined effect of the COVID-19 global pandemic and the decline in crude oil prices.
“We are pleased to have the support of each of our lenders as we navigate the unprecedented challenge presented by the effects of COVID-19 and the significant degradation and volatility in crude oil prices. In response, ClearStream has moved to ensure the safety and health of our people and to maintain liquidity, minimize capital outlays and emphasize cost reductions across all facets of our business,” commented Yves Paletta, Chief Executive Officer.
Senior Secured Debentures
ClearStream currently has $98.888 million of 8% senior secured debentures due March 23, 2026 (the “Senior Secured Debentures”) outstanding. Canso Investment Counsel Ltd., in its capacity as portfolio manager for and on behalf of certain accounts that it manages ("Canso"), and sole holder of the Senior Secured Debentures has agreed to accept the issuance of an additional 3,956 Senior Secured Debentures on June 30, 2020 and 4,114 Senior Secured Debentures on December 31, 2020 at a principal amount of $1,000 per Senior Secured Debenture in order to satisfy the interest that would otherwise become due and payable on such dates (the “Payment in Kind Transactions”). This will save ClearStream approximately $7.9 million in cash. Following the Payment in Kind Transactions, ClearStream will have approximately $107 million principal amount of Senior Secured Debentures outstanding at year-end 2020.
As Canso currently holds approximately 16% of ClearStream's outstanding common shares, approximately 99.8% of the outstanding Series 1 preferred shares, 100% of the outstanding series 2 preferred shares and 100% of the outstanding Senior Secured Debentures, it is an “insider” and "related party" of ClearStream and the Payment in Kind Transactions constitute a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61‑101"). ClearStream is relying on the financial hardship exemption for both the formal valuation and minority approval requirements of MI 61-101 for the Payment in Kind Transactions.