Source Energy announces recapitalization transaction

On October 7, 2020, Source Energy Services Ltd. (together with its affiliates, "Source Energy") announced a proposed recapitalization transaction designed to provide Source Energy with a stronger, long-term capital structure to withstand current industry challenges and build on its position as the largest frac sand provider in the Western Canadian sedimentary basin.

The recapitalization transaction, which Source Energy intends to implement by way of a corporate plan of arrangement under the Canada Business Corporations Act, is supported by holders of approximately 74% of the principal obligations under Source Energy's 10.5% senior secured first lien notes due 2021 and shareholders holding approximately 45% of Source Energy's common shares.

National Bank Financial Inc., an independent financial advisor to the Independent Committee and the Board of Directors, has provided opinions to the Independent Committee and the Board of Directors that, subject to the scope of review, assumptions and limitations set forth in its opinions: (i) the recapitalization transaction, if implemented, is fair, from a financial point of view, to the company, and (ii) the recapitalization transaction, if implemented, is fair, from a financial point of view, to the noteholders and the shareholders.

Further information on the key elements of the recapitalization transaction can be found on MarketWatch's website.

Source Energy is a logistics company that focuses on the supply and distribution of high quality Northern White frac sand, providing its customers with a full end-to-end solution supported by its Wisconsin mines and processing facilities, its Western Canadian terminal network and its "last mile" logistics capabilities.