TBE.DB - Twin Butte Convertible debentures

[LesPaul]

Not that I like it, but I believe the LRE deal had a similar dollar split for common and debenture holders.

 

Of course, receiving 75 cents on the dollar on LRE.DB is certainly far easier to swallow.

[alertmeipp]

If the convert is senior than the decommission liabilities, i can clearly see the convert holders push this into bk.

[alertmeipp]

Btw. There are 3$ on accrued interest. Probably close to 4 $... when all said and done.

[Cardboard]

We can get a sum like that for the company under bankruptcy, not pay a dime to management for change of control and keep all proceeds above bank debt. The only question is what happens to tax assets?

 

In any case, the equation or sharing does not work with the common.

 

Cardboard

[fjm222]

Redwater just set a precedent which put creditor claims ahead of abandonment liabilities. With issues this size bankruptcy costs/fees can really change your recovery value. Make sure you are thinking about that when trying to value the residual that convert holders are entitled if it went CCAA.

[alertmeipp]

But is it all creditors or just the secured one?

 

Yes bk fee vs potentially much higher oil price.

 

They are cash flow positive now. If oil goes to 60 ... thats another 50 cash flow

[Wilson-TPC]

Convertible holders got shafted.

 

Don't know if the deal will get approved.

[alertmeipp]

Interesting that the break up fee is only 5m

Td had a research note saying the deal will likely get voted down by debt holder.

 

Bank Didnt  get a cut why would the debt holder take 85 percnet cut.

[alertmeipp]

Lots can change in the next 2 months before the actual vote happen...

 

But as of now, are u guys thinking to vote for or against the deal?

I assume most here are debt holders?

 

 

[Cardboard]

It will be interesting to see what will be written in the "background to the arrangement" in the management circular. They picked that option because they can retain their jobs, it was rapid (as mentioned in the press release) and they get their change of control severances for those being terminated. Actually, it likely applies even if they get a new job after with newco.

 

These packages are worth a fait bit more than all the shares they held at $0.06. So the fact that management held shares wasn't such a large consideration in setting up that price. If you recall a few weeks back, they had not received a credit extension which made the stock collapse to the 5 to 6 cents range. Since they could not walk it down any lower, it likely help set the price for the acquisition.

 

I do agree that many things will likely happen over the next few weeks. We are very likely to hear from large unhappy debentureholders via the media in coming days. There was some of that with LRE but, at 75% of par along with accrued interest, there was not that much to fight. Here it is vastly different.

 

So Reignwood or whatever their name will probably have to sweeten the offer to get it accepted by debentureholders. $10 more is only $8.5 million and they already have invested a fair bit in this deal with lawyers, banks, etc. The $5 million breakup fee would likely pay a good chunk of these but, to kill a transaction of over $200 million if they are truly interested in the assets for a few millions makes no sense.

 

And yes if oil goes to $60 then all bets are off with cash flow exploding. Other offers or refinancing would likely arise. Unfortunately, tough to say post-Brexit.

[alertmeipp]

Yeah, will be interesting to see what other kind of offers they have had so far. And whether other offers will come now that this "stalking horse" bid is in place.

 

From the surface, I don't see how this deal can remotely be fair to debenture holders and even to the shareholders. Existing owners are giving up lots of upside for a mere 6 cents.

 

It smells more and more like a deal to keep jobs. OR the management just needed this deal to extend the run way for 2 months (or more if it gets voted down) to hopefully get better offers with the strengthening oil price. (Thus, the low break up fee and far away voting day - scheduled at Aug 10).

 

The debt will worth 18.4 cents for a dollar if this deal closes mid Aug. I expected much better.

 

 

[influx]

yeah interesting development here...I'll observe

 

this is telling

 

Furthermore, all of the directors and executive officers of Twin Butte have entered into support

agreements and have agreed to vote an aggregate of approximately 3.9% of the outstanding Twin Butte Shares and 0.08% of the outstanding Debentures in favor of the Transaction, subject to the provisions of such support agreements

[Wilson-TPC]

https://canaccordgenuity.bluematrix.com/sellside/EmailDocViewer?encrypt=03443eb9-3b61-4fbc-9109-016afee64807&mime=pdf&co=Canaccordgenuity&id=CA-InternalResearchDistribution@canaccordgenuity.com&source=mail

 

Take a read.

[LesPaul]

Thanks for sharing.

 

And if the DBs had closed at 13 cents the day before the halt? 15 cents? Considering the volume and the huge discount from par, a retail investor could have even pushed the price up to those levels the day before the halt. Kind of silly IMO.

 

Perhaps I'm just looking at this incorrectly because I still harbour some resentment from the disappointing offer...

 

[Cardboard]

Mark my words: this offer is dead.

 

Cardboard

[alertmeipp]

https://canaccordgenuity.bluematrix.com/sellside/EmailDocViewer?encrypt=03443eb9-3b61-4fbc-9109-016afee64807&mime=pdf&co=Canaccordgenuity&id=CA-InternalResearchDistribution@canaccordgenuity.com&source=mail

 

Take a read.

 

What about it?

[SafetyinNumbers]

Bloomberg article:

 

http://www.bloomberg.com/news/articles/2016-07-27/twin-butte-s-angry-creditors-said-to-hire-banker-for-better-deal

[LesPaul]

http://ir.twinbutteenergy.com/2016-07-27-Twin-Butte-Announces-that-Leading-Independent-Proxy-Advisory-Firms-ISS-and-Glass-Lewis-Recommend-Shareholders-of-Twin-Butte-Vote-for-the-Arrangement-and-Provides-Operations-Update

 

Update from management. Perhaps they're feeling the heat?

[SafetyinNumbers]

Every debenture holder I have spoken to is voting no or at least that's what they are telling me.

[LesPaul]

Another press release this morning and a second physical package in the mail 'reminding' me to vote accordingly last night.

 

Today's press release:

 

http://ir.twinbutteenergy.com/2016-08-04-Twin-Butte-reminds-Securityholders-of-the-importance-of-a-vote-for-its-proposed-Arrangement

[LesPaul]

http://ir.twinbutteenergy.com/index.php?s=2429&item=122652

 

 

Twin Butte Announces Additional Fairness Opinion and Postponement of Meeting

 

CALGARY, Aug. 9, 2016 /CNW/ - (TSX: TBE) – Twin Butte Energy Ltd. ("Twin Butte" or the "Company") announces that it has engaged Canaccord Genuity Corp. ("Canaccord") as a financial advisor and that Canaccord has provided the board of directors of the Company with an opinion, as of the date hereof, that the consideration to be received by debentureholders of Twin Butte pursuant to the proposed plan of arrangement (the "Arrangement") in respect of Twin Butte and its securityholders and involving Reignwood Resources Holding Pte. Ltd. (the "Purchaser") and Reignwood Resources Trading UK Limited is fair, from a financial point of view, to the Twin Butte debentureholders. A full copy of the written fairness opinion will be filed on Twin Butte's SEDAR profile and will be available for viewing at www.sedar.com and on Twin Butte's website at www.twinbutteenergy.com.

 

In order to provide Twin Butte's securityholders with time to consider the conclusions set forth in Canaccord's fairness opinion, Twin Butte has elected to postpone its annual and special meeting of securityholders, which was originally scheduled for 9:00 a.m. (Calgary time) on August 10, 2016 until 9:00 a.m. (Calgary time) on August 29, 2016. The July 11, 2016 record date and the place of the meeting will remain the same. As a result of the postponement of the meeting to August 29, 2016, Twin Butte has extended the return deadline for proxies to forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the date of the postponed meeting. Subject to the satisfaction or waiver of all conditions to closing, the parties now expect the Arrangement to close in late September.

 

In connection with the postponement of the meeting and related matters, Twin Butte has entered into an amending agreement to the arrangement agreement with the Purchaser to give effect to (among other things) the postponement of the meeting, without the consent of Twin Butte's lenders under its credit agreement.  Failure to obtain such consent to the amending agreement, and the matters set forth therein, is an event of default under Twin Butte's credit agreement. Twin Butte intends to seek waivers from its lending syndicate for the entering into of the amending agreement and matters set forth therein. There are no assurances that the lenders will consent to the amending agreement, including any of the matters set forth therein, agree to any necessary waivers or refrain from exercising any rights or remedies they have, including accelerating the repayment of the Company's outstanding bank debt and enforcing their security by appointing a receiver to liquidate the Company's assets and manage the Company's affairs. In such events, the Arrangement will be terminated. A copy of the amending agreement will be filed on Twin Butte's SEDAR profile and will be available for viewing at www.sedar.com.

 

The board of directors of Twin Butte has previously stated, and subsequent to the receipt and consideration of the Canaccord fairness opinion continues to support its determinations, that: (i) the Arrangement is in the best interests of Twin Butte and the Twin Butte securityholders; (ii) Twin Butte securityholders vote in favor of the Arrangement; and (iii) the consideration to be received by Twin Butte securityholders pursuant to the Arrangement is fair to the Twin Butte securityholders.

 

Canaccord's written fairness opinion sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Canaccord in connection with the delivery of the fairness opinion.  The summary of the fairness opinion is qualified in its entirety by reference to the full text of the written fairness opinion which will be filed on Twin Butte's SEDAR profile and will be available for viewing at www.sedar.com and on Twin Butte's website at www.twinbutteenergy.com.

 

Peters & Co. Limited has also provided the board of directors of Twin Butte with an opinion, as of June 23, 2016, that the consideration to be received by the shareholders of Twin Butte pursuant to the Arrangement is fair, from a financial point of view, to the shareholders of Twin Butte.

 

Securityholders who have not voted in respect of the Arrangement or wish to change their vote may do so by following the instructions set forth on the proxy or voting instruction form provided to them. Securityholders may revoke a previously voted proxy with an instrument in writing, including another proxy, signed by the securityholder and delivered care of Twin Butte to Computershare Trust Company of Canada. In order to revoke a proxy previously delivered by an intermediary or its agent, on their behalf, beneficial securityholders should carefully follow any revocation instructions set forth on the voting instruction form provided to them by their intermediary or agent.

[influx]

http://sedar.com/GetFile.do?lang=EN&docClass=8&issuerNo=00001562&issuerType=03&projectNo=02524425&docId=3975097

[bizaro86]

I find their use of the word "premium" to refer to the debentures to be incredibly misleading given they are getting much less than Par. Th division between debenture holders and shareholders here is offensive.

[alertmeipp]

What a disaster...

 

 

Twin Butte Energy announces receipt of notice of intention to enforce security and receivership application

 

CALGARY, Aug. 30, 2016 /CNW/ - Twin Butte Energy Ltd. (TSX: TBE) ("Twin Butte" or the "Company") announces that following the results of its meeting of securityholders held on August 29, 2016, whereby (among other things) the debentureholders of Twin Butte did not approve a proposed plan of arrangement in respect of Twin Butte and its securityholders, Twin Butte's lenders under its senior secured credit facilities issued to the Company a demand letter and notice under section 244 of the Bankruptcy and Insolvency Act (Canada) (the "BIA") whereby such lenders set forth their intention to enforce their security for repayment of approximately $205.4 million owed under Twin Butte's senior secured credit facilities. As a result of the current financial position of the Company and following its thorough review of strategic alternatives available to the Company, the Company has agreed to waive the 10 day notice period set forth under the BIA for the enforcement by the lenders' of their security in order to, among other things, allow the Company's assets to be operated in a safe and responsible manner. The application for the appointment of the receiver is anticipated to be heard on September 1, 2016 at the Court of Queen's Bench in Calgary, Alberta. At such application, FTI Consulting Canada Inc. is expected to be appointed the receiver and manager over the assets, undertakings and property of Twin Butte. Upon the appointment of the receiver, it is expected that all of Twin Butte's directors will resign.

 

The Company also announces that it has received a notice from the Toronto Stock Exchange (the "TSX") that the TSX is reviewing the eligibility of the continued listing of Twin Butte's common shares and debentures with respect to Twin Butte meeting the continued listing requirements of the TSX.  The Company has been granted 30 days in which to regain compliance with these requirements. Notwithstanding the foregoing, the TSX has been notified of the anticipated receivership application and it is expected that the Company's common shares and debentures may be suspended or delisted prior to such 30 day period.

 

 

Read more at http://www.stockhouse.com/news/press-releases/2016/08/30/twin-butte-energy-announces-receipt-of-notice-of-intention-to-enforce-security#J7VU6VIXk3TF8LrV.99

 

 

 

 

[influx]

I wonder if the public and/or TBE.DB holders are entitled to review all the offers that the TBE management received? Do you know how this process goes?