Frontera Announces CAD$40.5 Million (US$30 million) Substantial Issuer Bid and Redetermined Paid-Up Capital Estimate of CAD$14.98 Per Share
Offer Results in a
Over
Additional Dividends, Share Buybacks, Distributions, Bond Buybacks or Other Investor Initiatives May Be Considered in the Future
The Offer is expected to commence on
The Company plans to fund the Share repurchases through available cash on hand. The Offer is denominated in Canadian dollars, and Shareholders will have the option to elect to receive payment in either Canadian or
Purpose of the Offer
As part of its efforts to maximize value for Shareholders, the Company has identified the Offer as an attractive and efficient means to return capital to Shareholders. Upon successful completion of the Offer, the Company will have returned over
On
Assuming full and pro-rata shareholder participation, the Offer represents a CAD$0.48 per Share distribution equivalent to a 6.6% yield on the Company's stock price prior to the announcement of the Offer during the Company's second quarter 2024 results. Including all dividends declared this year, the year-to-date distribution total to shareholders would be CAD$0.67 per Share (equivalent to a 9.2% yield). The Board shall continue to consider future investor initiatives in 2024 and beyond, including potential additional dividends, share buybacks, distributions, bond buybacks or other initiatives, based on the overall results of the businesses, cash flow generation and the Company's strategic goals.
Purchase Price
Frontera will pay the Purchase Price of
Each Shareholder who has properly deposited Shares and who has not withdrawn such Shares will receive the Purchase Price, payable in cash (subject to applicable withholding taxes, if any), for all Shares taken up by the Company upon the terms and subject to the conditions of the Offer.
If more than 3,375,000 Shares are tendered for purchase, the Company will purchase the Shares on a pro rata basis after giving effect to "odd lot" tenders (Shares tendered by Shareholders beneficially owning fewer than 100 Shares), which will not be subject to proration. In that case, Shares that are tendered but not purchased, will be returned to Shareholders.
Manner of Tender
Pursuant to the terms and subject to the conditions of the Offer, Shareholders wishing to tender to the Offer may do so by making an election to tender a specified number of Shares (representing, in the Shareholders' discretion, all or a portion of the Shareholders' Shares) at the Purchase Price.
Additional Information
As of
The Offer is optional for all Shareholders, who are free to choose whether to participate, and if they participate how many Shares to tender. Any Shareholders who do not deposit their Shares (or whose Shares are not purchased under the Offer) will realize a proportionate increase in their equity interest in the Company, to the extent that Shares are purchased under the Offer.
In connection with the Offer, Frontera has suspended Share repurchases under its normal course issuer bid ("NCIB") effective
The terms and conditions of the Offer, including instructions for tendering Shares, will be included in the formal offer to purchase and issuer bid circular, letter of transmittal, notice of guaranteed delivery and other related documents (the "Offer Documents"). On or about
The Offer is not conditional upon any minimum number of Shares being tendered. However, the Offer will be subject to other conditions described in the Offer Documents. Frontera reserves the right, subject to applicable laws, to withdraw, extend or amend the Offer, if certain events occur at any time prior to the payment for the tendered Shares.
The
The Company has engaged
The Offer referred to in this news release has not yet commenced. This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Shares. The solicitation and the offer to buy Shares will only be made pursuant to the Offer Documents to be filed with the applicable Canadian securities regulatory authorities. The Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of offers to sell Shares would not be in compliance with the laws of that jurisdiction. None of Frontera, its Board or the depositary makes any recommendation to Shareholders as to whether to tender or refrain from tendering any or all of their Shares pursuant to the Offer. Shareholders are strongly urged to read the Offer Documents carefully and to consult with their financial, tax and legal advisors prior to making any decision with respect to the Offer.
Estimated Paid-Up Capital Determination
The Company also announces that it has re-determined the estimated "paid-up capital" for purposes of the Income Tax Act (
The Company entered into Minutes of Settlement dated
The Company has assessed the impact of the Settlement on the computation of the historical paid-up capital in respect of the Shares. This assessment has resulted in a decrease in the net capital losses of the Company, as last reported in the 2023 Annual Consolidated Financial Statements, and an increase in the computed amount of the historical paid-up capital in respect of the Shares. This adjustment may impact the quantum of dividends deemed to have been received by certain shareholders of Frontera in respect of the repurchase of Shares pursuant to the Company's substantial issuer bid that was completed on
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Forward-Looking Statements
This news release contains forward-looking information or forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws, including statements as to the Company's current intentions regarding commencement of the Offer, the timing, terms and conditions of the Offer, the participation of the Principal Shareholders and certain officers, the number of Shares to be purchased and the amount of capital returned to Shareholders under the Offer and the consideration of future investor initiatives in 2024 and beyond. Any such forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends and current market and other conditions. Readers should also refer to the risk factors set forth in the Company's annual information form and management's discussion and analysis for the year ended
Social Media
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Twitter: https://twitter.com/fronteraenergy?lang=en
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