ENTREC Corporation

ENTREC Corporation

June 10, 2016 22:41 ET

ENTREC Announces Approval of Proposed Amendments of Convertible Debentures

ACHESON, ALBERTA--(Marketwired - June 10, 2016) - ENTREC Corporation ("ENTREC" or the "Corporation") (TSX:ENT), an employee-owned heavy haul transportation and crane solutions provider, is pleased to announce that the holders of its 7.00% convertible unsecured subordinated debentures due October 31, 2017 (ENT.DB) (the "Debentures") have approved the proposed amendments to the Debentures ("Debenture Amendments") at a special meeting of debentureholders held today. The Debenture Amendments will result in the following changes to the Debentures:

  1. INCREASING the underlying interest rate from 7.00% to 8.50% effective October 31, 2016 (being the commencement of the next interest rate accrual period);
  2. DECREASING the conversion price from $2.60 to $1.00 per share of the Corporation;
  3. EXTENDING the maturity date from October 31, 2017 to June 30, 2021;
  4. PERMITTING the Corporation to redeem the Amended Debentures, in whole or in part, at any time up to June 30, 2021, at a price equal to the principal amount thereof plus accrued and unpaid interest to, but excluding the date of the redemption;
  5. REMOVING the Corporation's ability to, upon the conversion of the Amended Debentures by a holder thereof, elect to pay the holder cash in an amount and at such time as determined in accordance with the Indenture; and
  6. REMOVING the Corporation's ability to undertake any rights offering, issuance of securities, subdivision of the common shares of the Corporation, dividend or other distribution on the common shares of the Corporation or any other securities, capital reorganization, reclassification or any similar type of transaction in which (i) the number of securities to be issued, (ii) the price at which securities are to be issued, converted or exchanged, or (iii) any property or cash that is to be distributed or allocated, is in whole or in part based upon, determined in reference to, related to or a function of, directly or indirectly, (x) the exercise or potential exercise of the Common Share Redemption Right (as defined in the trust indenture governing the Debentures) or the Common Share Repayment Right (as defined in the trust indenture governing the Debentures), or (y) the Current Market Price (as defined in the trust indenture governing the Debentures) determined in connection with the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right.

The Corporation will redeem on a pro rata basis $3,500,000 of the principal amount of Amended Debentures outstanding as at the close of business on October 31, 2017 (the "Partial Redemption"). The Partial Redemption will be for a cash payment equal to the principal amount thereof plus accrued and unpaid interest to, but excluding the date of the redemption.

"We are delighted to have developed a collaborative outcome that allows ENTREC to continue executing on its growth initiatives, while providing our investors with enhanced returns in exchange for their continued support," said John M. Stevens, ENTREC's President and Chief Executive Officer. "We are excited about the added flexibility that allows us to capitalize on attractive growth opportunities in the near and medium term."

Subject to receipt of final approval from the Toronto Stock Exchange, the effective date of the increase in the interest rate will be October 31, 2016 (being the commencement of the next interest rate accrual period) while the other Debenture Amendments will be effective earlier on the date that the Corporation enters into a second supplemental trust indenture with the debenture trustee embodying such amendments.


ENTREC is an employee-owned heavy haul transportation and crane solutions provider to the oil and natural gas, construction, petrochemical, mining and power generation industries. ENTREC is listed on the Toronto Stock Exchange under the symbol ENT.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements included herein constitute "forward-looking statements". All statements included in this press release that address future events, conditions or results of operations, including in respect of the Debenture Amendments, are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking words such as "may", "should", "will", "could", "expect", "intend", "plan", "estimate", "anticipate", "believe", "future" or "continue" or the negative forms thereof or similar variations. Forward looking statements in this press release include, but are not limited to, the expected Partial Redemption and the expected effective date of the Debenture Amendments. These forward-looking statements are based on certain assumptions and analyses made by management in light of their experiences and their perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate in the circumstances. Debentureholders are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of risks and uncertainties, including, but not limited to that the Debenture Amendments will not be successfully completed for any reason and the risk that, if completed, the Corporation will not have sufficient funds to fund the Partial Redemption or be able to pay the interest and/or repay the principal amount outstanding under the Debentures when due. Many of such risks and uncertainties are outside the control of the Corporation and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. In making such forward-looking statements, management has relied upon a number of material factors and assumptions, including with respect to general economic and financial conditions, interest rates, exchange rates, equity and debt markets, business competition, changes in government regulations or in tax laws, acts and omissions of third parties, and the ability of the Corporation to obtain final TSX approval for the Debenture Amendments. Such forward-looking statements should, therefore, be construed in light of such factors and assumptions. All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth above. The Corporation is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Contact Information

  • John M. Stevens - President & CEO
    (780) 960-5625

    Jason Vandenberg - CFO
    (780) 960-5630