High Arctic Announces Reorganization to Create Two Energy Services Companies, Return of Capital to Shareholders, and Annual General and Special Meeting of Shareholders - Seite 2

For years the Corporation has both pursued or entertained potential business combination transactions. The distinctly different profiles of the North American and PNG businesses have proven to be the main ‎‎impediment to identifying transactions acceptable to all parties and in the best interests of Shareholders. Finding unique companies desirous of being linked to both distinct businesses has proven unsuccessful. ‎Companies to whom association with our North American Business may be attractive are a distinctly broader ‎‎group and do not overlap with the international companies with whom the PNG business and its risk profile ‎‎may fit well.

Board and management unanimously agree that the separation of these two businesses will ensure that ‎‎management is dedicated to enhancing the value of each business and accessing new pathways ‎to ‎transformative and accretive transactions that are currently inaccessible.‎

Benefits to Shareholders

Certain of the expected benefits to Shareholders of the Arrangement are as follows:

• The benefits of dividing the Corporation into its distinct businesses;‎
• Each company will be owned by Shareholders on a pro rata basis with reference to the number of ‎High Arctic Common Shares held prior to the Arrangement;‎
• The Arrangement is expected to improve the market’s identification and valuation of each company ‎and allow Shareholders, investors and analysts to more accurately compare, evaluate and ‎value each of the companies on a stand-alone basis against appropriate peers, benchmarks ‎and performance criteria specific to that company;‎
• Each company will have independent access to capital (equity and debt) which management ‎believes will result in optimal capital allocation;‎
• The procedures by which the Arrangement is to be approved, including the requirement for approval ‎of the Arrangement by the Court after a hearing at which fairness to the ‎Corporation’s securityholders will be ‎considered;
• ‎The Corporation has received the financial Fairness Opinion (defined below);
• The availability of rights of dissent to Shareholders with respect to the Arrangement; and
• ‎The tax treatment of the Arrangement is ‎expected to be tax efficient for Canadian tax purposes for ‎most shareholders.‎

Board and Management of High Arctic and SpinCo