DIVERGENT Energy Services Announces Debenture Restructuring Initiatives
CALGARY, Alberta, Nov. 02, 2020 (GLOBE NEWSWIRE) -- DIVERGENT Energy Services Corp. (“Divergent”, the "Company",
or “DVG”) is pleased to announce its proposed plan to restructure its CAD $5,750,000 debentures as the next step in its strategic transformation.
As previously announced on October 1, 2020, the Company’s strategic transformation is underway with a priority on creating a stronger balance sheet in order to attract growth capital for emerging opportunities in the United States. The first step was the conversion of certain current liabilities into manageable long-term debt, the repayment of which coincides with the Company’s expected cash flows.
The next step in Divergent’s strategic transformation is to seek to restructure its previously issued secured debentures (the "Debentures"). Details of this next step are summarized below, and in greater detail in the Business Transformation presentation which is available on the Company’s website at www.divergentenergyservices.com.
Proposal to Debenture Holders
The Company will be seeking approval from its Debenture holders on a proposal to (a) convert the amount of the Debentures representing 75% of the principal amount outstanding, or CAD $4,312,500 of the Debentures, into Common Shares on a one-time pro-rata basis at the price of CAD $0.03 per Common Share (pre-consolidation) (the "Debenture Conversion"), and (b) concurrent with the Debenture Conversion, extend the Maturity Date of the remaining Debentures, representing 25% of the current principal amount outstanding, or CAD $1,437,500, to December 31, 2025 (the "Extended Maturity Date"). As consideration for the agreement to extend the Debentures, the Company will, subject to receipt of applicable approvals including that of the TSX Venture Exchange ("TSXV"), issue for every dollar value of the principal amount of the Debentures being extended, two (2) Common Share purchase warrants, each having an exercise price of CAD $0.03 (or CAD $0.30 post conversion) for a term of two (2) years.
The Debenture Conversion is subject to (a) the Company completing a 10:1 consolidation of its Common Shares (the "Consolidation") prior to completing the Debenture Conversion, (b) the Debenture Conversion being completed on or before April 30, 2021, and (c) receipt of all required approvals, including from the TSXV and shareholder approval, if applicable.