Savanna Energy Services Corp (TSX: SVY) announced that its investor, Alberta Investment Management Corp (AIMCo), opposes the company’s takeover by Total Energy Services Inc (TSX: TOT). Total announced its intention to acquire the shares of the Calgary contract drilling and oilfield services business last week. AIMCo advised that a change in Savanna’s control would result in a change in the terms of its recent financing agreement. This includes a $200 million loan facility, which would become immediately due and payable upon closing should Total acquire Savanna.
Savanna Provides Update to AIMCo Financing
CALGARY, ALBERTA–(Marketwired – Nov. 28, 2016) – Savanna Energy Services Corp. (“Savanna”) (TSX:SVY) announces that Alberta Investment Management Corporation (“AIMCo”) has advised it that AIMCo does not intend to consent to a change of control of Savanna that may result from Total Energy Services Inc.’s previously announced intention to make an offer for the outstanding common shares of Savanna (the “Common Shares”). In the event of a change of control within six months of the closing date of the previously announced $200 million second lien senior secured term loan facility (the “Term Loan”), all amounts outstanding under the Term Loan would become immediately due and payable plus an amount of 3% of the $200 million commitment amount.
The Corporation also announces that the Corporation and AIMCo have agreed to fix the exercise price of the 7 million common share purchase warrants (the “Warrrants”) to be issued to AIMCo on the initial draw under the Term Loan at $2.50. Pursuant to the original commitment with AIMCo, the terms of the Warrants provided Savanna the option to require AIMCo to exercise all or any portion of the Warrants provided the volume weighted average price of the Common Shares is greater than the exercise price of the warrants for 60 consecutive calendar days. The amendments also provide that the 60 consecutive calendar days will exclude any and all calendar days during which a change of control transaction has been publicly announced, proposed or made and remains outstanding.
AIMCo has advised Savanna that it remains supportive of Savanna and is fully committed to completing the previously announced financings.
Savanna is a leading contract drilling and oilfield services company operating in North America and Australia providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading Aboriginal relationships.
Savanna Energy Services Corp.
President and Chief Executive Officer
Tel: (403) 267-6728
Photo courtesy of Savanna Energy Services Corp