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ClearStream Receives Capital Injection and Amends Credit Facilities to Support Growth
September 11, 2019
Source: Yahoo Finance
ClearStream Energy Services Inc. (“ClearStream” or the “Company”) (TSX: CSM) announces that its wholly-owned subsidiary, ClearStream Energy Holdings LP (“CEHLP”), has entered into a first amending agreement with, among others, the Company and Bank of Montreal, as administrative agent, pursuant to which its third amended and restated credit agreement dated as of June 26, 2019 (as so amended, the “Credit Agreement”) was amended in order to, among other things, provide for the advance by certain term lenders of a new term loan in the aggregate amount of $17 million (the “New Term Loan”). Each term lender is fully-managed by Canso Investment Counsel, Ltd. (“Canso”), in Canso’s capacity as portfolio manager.
The proceeds of the New Term Loan will be used to reduce the outstanding amount of the revolving facility under the Credit Agreement and for certain expenses of the agent under the Credit Agreement. The other covenants, terms and conditions under the Credit Agreement remain substantially unchanged.
CEHLP has also received the approval of the Revolving Lenders (as defined in the Credit Agreement) to increase the maximum amount available under the revolving facility to $55 million (from $50 million) until December 31, 2019 (the “Revolving Facility Increase”), which will be implemented in a second amending agreement to the Credit Agreement on or about September 13, 2019.
The New Term Loan and the Revolving Facility Increase will support the growth that ClearStream has experienced in both its legacy business and from the acquisition on June 28, 2019 of certain assets of the production services division of AECOM Production Services Ltd. and all of the shares of Universal Weld Overlays Inc.
In aggregate, accounts managed by Canso as portfolio manager currently hold: (i) 17,153,650 common shares of the Company, representing approximately 16% of the Company’s outstanding common shares; (ii) all of the Company’s outstanding 8.00% senior secured debentures due 2026; and (iii) all of the Company’s outstanding Series 1 and Series 2 preferred shares. As Canso is an insider of the Company, the Credit Agreement constitutes a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Investments of certain of the Canadian Securities Administrators.
The Company is relying on an exemption from the minority approval requirement that applies to related party transactions, which exemption is available to the Company as (i) the New Term Loan was obtained on reasonable commercial terms that are not less advantageous to CEHLP or the Company than if the New Term Loan was obtained from a person dealing at arm's length with CEHLP or the Company; (ii) the New Term Loan is not convertible into equity or voting securities of the Company or a subsidiary of the Company; and (iii) the New Term Loan is not repayable as to principal or interest in equity or voting securities of the Company or a subsidiary of the Company.
About ClearStream Energy Services Inc.
ClearStream is a fully integrated provider of upstream, midstream and refinery production services, which includes facility maintenance and turnarounds, pipeline wear technology, facilities construction, welding and fabrication to the energy and other industries in Western Canada. For more information about ClearStream, please visit www.clearstreamenergy.ca.
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Chief Financial Officer
ClearStream Energy Services Inc.
Chief Executive Officer
ClearStream Energy Services Inc.