Divestco Receives Court Approval for Sales Solicitation Process and "Stalking Horse" Bid
Calgary, Alberta--(Newsfile Corp. - March 27, 2019) - Further to its announcement of March 19, 2019, Divestco Inc. (TSXV: DVT.H) ("Divestco" or the "Company") announces that, in connection with its creditor protection proceedings under the Companies' Creditors Arrangement Act (the "CCAA"), it has received approval from the Court of Queen's Bench of Alberta to commence its supervised sales solicitation process (the "SSP"), to be carried out by Divestco and its financial advisor Grant Thornton Corporate Finance Inc. ("GTCFI"), and, in connection therewith, its previously announced transaction with 2179602 Alberta Ltd. (the "Proposed Purchaser") has been approved as Divestco's "stalking horse bid" (the "Bid") and the Proposed Purchaser approved as Divestco's "stalking horse" bidder. The Court also approved an extension to the stay of proceedings granted in connection with Divestco's CCAA proceedings until May 24, 2019.
As per Divestco's prior disclosure, the Company has entered into a definitive asset purchase and sale agreement with the Proposed Purchaser to sell all or substantially all of Divestco's assets to the Proposed Purchaser (the "Acquisition Agreement"). With respect to the Acquisition Agreement, the Court has approved an aggregate estimated purchase price of approximately $15.2 million, being comprised of a credit bid and set-off of debt owing to the Proposed Purchaser of approximately $13.8 million, the assumption of certain assumed liabilities (which have a value currently estimated to be approximately $980,000) and the payment of the actual costs of the CCAA proceedings (which are currently estimated to total approximately $400,000). The Bid is subject to higher or better offers, as other interested parties have an opportunity to submit competing bids.
Pursuant to the SSP, interested parties will be given an opportunity to submit offers for the acquisition of all or substantially all of the assets of Divestco for cash proceeds equal to the aggregate estimated purchase price of $15.2 million as described above, plus a break fee of $425,000 payable to the Proposed Purchaser should the transaction as contemplated by the Acquisition Agreement not be completed (other than as a result of a breach of the Acquisition Agreement by the Proposed Purchaser) and plus a "Minimum Incremental Overbid" (within the meaning of the SSP) of $100,000.
A non-confidential teaser will be made available by GTCFI to prospective purchasers and posted on the Monitor's website as soon as practicable, and in any event, no later than April 1, 2019. Upon execution of a non-disclosure agreement acceptable to Divestco and GTCFI, potential buyers will be provided access to a virtual data room. The deadline for submission of final, binding bids is 12:00 pm Calgary time on April 30, 2019. If none of the submitted bids constitute a superior offer, as determined by GTCFI in its sole discretion, Divestco shall promptly apply to the Court of Queen's Bench of Alberta for an order approving the Bid. However, if one or more of the submitted bids constitutes a superior offer, GTCFI shall provide the Proposed Purchaser and prospective buyers with the opportunity to make further bids through an auction process, which is anticipated to commence on May 14, 2019 and conclude no later than five business days following the start of the auction unless extended by GTCFI and Divestco, with approval of the Monitor.
Further details respecting the terms of the Bid, prior to the amendments approved by the Court, are included in Divestco's March 19, 2019 news release and a copy of both the Order (including further details of the Company's SSP) and the Acquisition Agreement will be filed under the Company's profile on the System for Electronic Document Analysis and Retrieval (www.sedar.ca) and will also be available, along with additional information respecting the CCAA proceedings, on the Monitor's website (www.grantthornton.ca/Divestco). Readers are urged to consult the full text of all of those documents for further, more detailed, information. Readers are cautioned that there is no guarantee whatsoever that the CCAA proceedings, the SSP, any transaction contemplated by the Acquisition Agreement or the Bid or any other form of restructuring will resolve Divestco's financial issues or result in the realization by Divestco or Divestco's stakeholders of any particular value.
Any potential buyer interested in participating in the SSP should contact GTCFI by email at firstname.lastname@example.org. Similarly, any questions in respect of the SSP may be directed to the Monitor at email@example.com.
About the Company
Divestco is an exploration services company that provides a comprehensive and integrated portfolio of data, software, and services to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of data, software and services offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary and trades on the NEX under the symbol "DVT.H". Additional information on Divestco is available on its website at www.divestco.com and on SEDAR at www.sedar.com.
For more information please contact:
Divestco Inc. (www.divestco.com)
Mr. Stephen Popadynetz Mr. Steve Sinclair-Smith
CEO and President Chief Operating Officer
Neither the TSX Venture Exchange, the NEX nor the Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Forward Looking Information
This news release contains certain information that constitutes forward-looking information under applicable securities legislation. All information other than statements of historical fact is forward-looking information. In some cases, forward-looking information can be identified by terminology such as "will", "expect", "plan", "intend", "should", "plan", "estimate", "potential", "continue", or the negative of these terms or other comparable terminology. The forward-looking information included in this news release includes, without limitation, information concerning the SSP and the terms, timing and process associated therewith.
The forward-looking information included in this news release is based on the Court orders received by Divestco to date, current expectations, estimates, projections and assumptions, which the Company believes are reasonable but which may prove to be incorrect and therefore such forward-looking information should not be unduly relied upon. The forward-looking information provided by Divestco in this news release is based on a number of assumptions regarding, among other things that: the SSP will proceed in accordance with the terms of the Court orders currently in place; the CCAA proceedings will unfold in a manner compliant with applicable law and materially consistent with precedent transactions and previous third party CCAA proceedings; all parties involved in Divestco's CCAA process and the SSP will undertake all of their current duties in a diligent manner consistent with past practice and applicable industry and professional standards; the facts and assumptions upon which the Company determined the values set forth in the Acquisition Agreement will prove correct in all material respects going forward; the actions and potential claims of other Divestco stakeholders will be resolved in a manner consistent with Divestco's current obligations; the Company will maintain its operations in a manner consistent with its expectations; and the Company will continue through its CCAA proceedings in a manner consistent with its current expectations.
The forward-looking information contained herein also involves a significant number of known and unknown risks, uncertainties which may cause actual results or performance to be materially different from any future results or performance expressed or implied herein. Along with the general risks faced by Divestco including issues relating to the ongoing industry and political climate in Alberta, these risks, uncertainties and other factors relating to the Company include, but are not limited to: the inherent authority and discretion of the Court may result in unforeseen changes outside of Divestco's control to the CCAA proceedings, the Acquisition Agreement (and transactions contemplated thereby), the SSP or otherwise; the claims of third parties and other Divestco stakeholders may impact the CCAA proceedings, the Acquisition Agreement (and transactions contemplated thereby), the SSP or otherwise in a manner not currently contemplated or controllable by Divestco; the decisions and oversight ability and authority of the Monitor and GTCFI may impact the CCAA proceedings and related transactions (including the SSP) in a manner not currently anticipated by Divestco; the level of indebtedness of the Company, the implementation and impact of obtaining any reorganization or restructuring of the assets and changes business and financial affairs of the Company have the ability to impact the CCAA proceedings and related transactions (including the SSP); the CCAA proceedings and related transactions (including the SSP) require a certain degree of diversion of management time and attention which may impact other projects or operations of Divestco; future actions and co-operation of the creditors of the Company will impact any outcome of the CCAA proceedings and related transactions (including the SSP); the Company's ability to generate sufficient cash-flow from operations or to obtain adequate financing on an ongoing basis to fund capital expenditures and working capital needs and to meet the Company's ongoing obligations during the CCAA process and thereafter may be compromised by a number of industry and market risks and factors outside of Divestco's control; the ability of the Company to maintain relationships with suppliers, customers, employees, shareholders and other third parties may be compromised in light of the Company's current liquidity situation and the CCAA proceedings; the success, form and procedures of the SSP may change in a manner outside of Divestco's control. Additional risks and uncertainties affecting the Company and its business and affairs are described in further detail in the Company's ongoing continuous disclosure documents, including its Annual and Interim Reports, as filed under the Company's profile on the System for Electronic Document Analysis and Retrieval.
Any forward looking information included in this news release is expressly qualified in its entirety by this cautionary statement. Any forward looking information included herein is made as of the date of this news release and the Company assumes no obligation to update or revise any forward looking information to reflect new events or circumstances, except as required by law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/43701