The Alberta Investment Management Corp. is investing in Calgary-based energy company Perpetual Energy Inc. by agreeing to a $45 million debt-with-warrants financing.
Under the agreement, AIMCo will purchase units of the company for $1.75 per unit totalling approximately $4.5 million. Each unit will consist of one common share and 0.21 of a common-share purchase warrant of the company.
The debt-with-warrants financing also includes a second lien loan, with Perpetual paying the debt for four years following the date of closing at a yearly interest rate of 8.1 per cent and AIMCo receiving 5.4 million additional warrants.
Read: AIMCo enters financing partnership with Calgary oil and gas company
“On behalf of our clients, AIMCo is very pleased to have the opportunity to enter into this strategic financing relationship with Perpetual Energy,” said Peter Pontikes, executive vice-president of public equities at AIMCo. “Perpetual has a demonstrated history of resiliency in its ability to manage through the cyclicality of Alberta’s energy sector.
“. . . We are confident that our investment provides this innovative company with the flexibility to weather the current market downturn and allow them to position for future growth.”
“Perpetual is pleased to enter into a long-term relationship with a strong and prudent institutional investor that has purposefully chosen to align with our equity shareholders, while providing a comprehensive debt refinancing solution,” said Sue Riddell Rose, president and chief executive officer at Perpetual.
The transaction is anticipated to close in early March 2017.