Transaction|July 8, 2020

Just Energy announces recapitalization

Torys acted as counsel to Sagard Credit Partners and another leading institutional investor, as senior term loan lenders and initial backstop parties, with a team that included Tony DeMarinis (restructuring), Amanda Balasubramanian and Jacob Weinstock (lending), Mike Amm, Michael Zackheim and Emma Sako (corporate/securities).

On July 8, 2020, Just Energy Group Inc. ("Just Energy") announced the conclusion of its strategic review and a comprehensive plan to strengthen and de-risk the business, which includes, among other things, a proposed recapitalization plan facilitated through a plan of arrangement under the Canada Business Corporations Act ("CBCA").

The recapitalization will include:

the exchange of C$100 million 6.75% subordinated convertible debentures due March 31, 2023 and C$160 million 6.75% subordinated convertible debentures due December 31, 2021 for new common equity;
the extension of C$335 million credit facilities by three years to December 2023, with revised covenants and a schedule of commitment reductions throughout the term;
the exchange of its existing senior unsecured term loan due September 12, 2023 and the remaining convertible bonds due December 31, 2020 for a new term loan due March 2024 with initial interest to be paid-in-kind and new common equity;
the exchange of all 8.50%, fixed-to-floating rate, cumulative, redeemable, perpetual preferred shares into new common equity;
new cash equity investment commitment of C$100 million; and
an initial reduction of annual cash interest expense by approximately C$45 million.

In total, the recapitalization will result in a reduction of approximately C$535 million in net debt and preferred shares.

The implementation of the recapitalization is expected in September 2020, pending court and securityholder approvals required under the CBCA, as well as applicable approvals by the Toronto Stock Exchange.

Further information can be found on Globe Newswire's website.

Just Energy is a leading retail consumer company specializing in electricity and natural gas commodities, energy efficiency solutions, and renewable energy options.