Tervita and Newalta Announce Completion of Merger
Merger Creates a Leading Canadian Energy-Focused Waste and Environmental Services Company
Tervita Common Shares and Warrants to Trade on TSX Within Two to Three Business Days
CALGARY, July 19, 2018 /PRNewswire/ - Tervita Corporation ("Tervita"), a private Alberta-based energy-focused waste and environmental services company, and Newalta Corporation ("Newalta") (TSX:NAL), are pleased to announce that they have today closed their previously announced business combination, which was completed by way of a plan of arrangement (the "Arrangement"). The completion of the Arrangement creates a leading energy-focused environmental solutions provider in Canada providing waste processing, treating, recycling and disposal services to customers in the oil and gas, mining and industrial sectors. The newly merged company will operate under the name Tervita Corporation.
John Cooper, President and Chief Executive Officer of Tervita Corporation, stated, "We are pleased to have now closed this important transaction and look forward to focusing on executing the robust business plan in front of us. We intend to deliver further value to our customers through our combined operations, and will focus on building shareholder value through continuing to grow Tervita Corporation, maximizing our operating results, and achieving the clearly identified and significant synergies that we expect from the merger."
John Barkhouse, President and Chief Executive Officer of Newalta, stated, "We are delighted to complete the merger with Tervita, and wish to thank all of our shareholders, employees and stakeholders for their support."
It is expected that the common shares and common share purchase warrants ("Warrants") of Tervita Corporation will each commence trading on the Toronto Stock Exchange ("TSX") under the trading symbols "TEV" and "TEV.WT", respectively, within two to three business days following the date of this press release and the issuance of a bulletin by the TSX regarding completion of the Arrangement.
After giving effect to the Arrangement, pursuant to which each former shareholder of Newalta (whose common shares closed at $1.21 per share on the TSX on July 18, 2018) received 0.1467 of one common share of Tervita Corporation for each Newalta common share held and 0.0307 of one Warrant, Tervita Corporation has approximately 117.6 million common shares outstanding and 2.7 million Warrants. Each Warrant is exercisable for one Tervita Corporation common share at an exercise price of $18.75 per share until 4:30 pm (Calgary time) on July 19, 2020.
Although the waiting period under the Competition Act (Canada) has expired, the Commissioner of Competition has not, at this time, issued a clearance in the form of an advance ruling certificate or no-action letter, in respect of the Arrangement. The Competition Act (Canada) permits the Commissioner of Competition to make an application to the Competition Tribunal in respect of a transaction for a period of one year after its implementation.
Additionally, pursuant to the Arrangement, Tervita 2018 Escrow Corporation was wound-up into Tervita. In connection with such winding up, the US$250 million aggregate principal amount of 7.625% senior secured notes due 2021 (the "Notes") that were issued by Tervita 2018 Escrow Corporation on June 1, 2018, as previously announced, were automatically exchanged today for a like principal amount of additional notes issued by Tervita Corporation under the indenture governing Tervita Corporation's existing 7.625% Senior Secured Notes due 2021 (the "Secured Notes"), under which Tervita previously issued US$360.0 million aggregate principal amount of Secured Notes. The Notes have been deemed cancelled.
As part of the Arrangement, all of Newalta's outstanding debt has been refinanced. Newalta's $275 million senior unsecured debentures have been called pursuant to the terms under the related Indenture and are fully defeased. All amounts drawn on Newalta's $150 million credit facility have been repaid. Letters of credit ("LCs") issued under the Newalta credit facility have been replaced with LCs issued under Tervita Corporation's $200 million credit facility and the $150 million credit facility has been cancelled. These refinancings were funded from the proceeds of the US$250 million Secured Notes received from 2018 Tervita Escrow Corporation and cash on hand.
After giving effect to these financing activities, Tervita Corporation has US$610 million of 7.625% Secured Notes and remains fully undrawn on its $200 million secured credit facility due December 2019.
Tervita Corporation expects to release Tervita's and Newalta's individual Q2 results on August 9, 2018 and Tervita Corporation further anticipates providing an updated investor presentation during Q3 2018, which will be posted to its website. The first reporting period of the combined operating and financial results of Tervita and Newalta will be for the quarter ended September 30, 2018, which results are expected to be released in November 2018.
Tervita will hold a conference call today at 2:00 pm Mountain Time (4:00 pm Eastern Time). To participate in the teleconference, please call 647-427-7450 or toll free 888-231-8191. To access the simultaneous webcast, please visit https://event.on24.com/wcc/r/1799718/253CC0D83D1C4EC703E0F08BD02599E8.
For more detailed information in respect of Tervita Corporation, please see the joint information circular of Tervita and Newalta dated March 23, 2018, which was prepared in connection with the Arrangement and is available for viewing electronically on SEDAR at www.sedar.com.
Forward-Looking Information
Certain statements contained in this news release constitute "forward-looking information" as defined under applicable securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "potential", "strategy", "target" and similar expressions, as they relate to Tervita Corporation or its management, are intended to identify forward-looking information. In particular, forward-looking information included in this news release includes information with respect to the expected trading date of the Tervita Corporation common shares and Warrants on the TSX, the expectation that Tervita Corporation is a leading energy-focused environmental solutions provider in Canada, the expectation of the delivery of further value to the customers of Tervita Corporation.
Such forward-looking information reflects the current views of Tervita Corporation with respect to future events and are based on certain key expectations and assumptions made by Tervita Corporation. Although Tervita Corporation believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information as Tervita Corporation cannot give any assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the failure to realize anticipated benefits and other synergies of the Arrangement; risks regarding the integration of Newalta and Tervita; and the incorrect assessment of the value of Tervita and/or Newalta. In addition, general factors and risks include, but are not limited to: the strength of the oil and gas industry; general market conditions; fluctuations in commodity prices for oil and the prices Tervita Corporation receives for its recovered oil; fluctuations in interest rates and exchange rates; financial covenants in debt agreements; the effectiveness of Tervita Corporation's cash flow management activities and cost rationalization initiatives; Tervita Corporation's ability to secure alternative financing, if needed, at all or on terms acceptable to Tervita Corporation, and consistent with its capital structure objectives; the competitive environment of Tervita Corporation's industry in Canada and the United States; timing and term of contracts for Tervita Corporation's services; risk of pending and future legal proceedings; and such other risks or factors described from time to time in reports Tervita Corporation files with securities regulatory authorities. Additional information on factors that could affect Tervita Corporation's operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking information contained in this news release is made as of the date of this document and, in each case, is expressly qualified by this cautionary statement. Unless otherwise required by law, Tervita Corporation does not intend, or assume any obligation, to update any such forward-looking information.
SOURCE Tervita Corporation
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