TENAZ ENERGY CORP. ANNOUNCES ADDITION OF A CASH ALTERNATIVE TO PREVIOUSLY ANNOUNCED ALL-SHARE ACQUISITION OF SDX ENERGY PLC – QNT Press Release

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/NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW./

CALGARY, AB, June 30, 2022 /CNW/ – Tenaz Energy Corp. (“Tenaz“, “we“, “our“, “us” or the “Company“) (TSX:TNZ) is pleased to announce, concurrent with our disclosure in the UK market, the addition of a cash alternative (the “Cash Alternative“) to the previously announced all-share acquisition (the “Transaction“) of all of the issued and to be issued share capital of SDX Energy PLC (“SDX“). Under the terms of the Cash Alternative, SDX shareholders will retain the right to receive 0.075 common shares of Tenaz (“Tenaz Shares“) for each SDX share (“SDX Share“), but will also be provided with an option to receive cash consideration for each SDX Share in lieu of receiving Tenaz Shares, subject to the terms and conditions outlined herein. Tenaz’s full UK release can be accessed on the Tenaz website, www.tenazenergy.com. A summary of the key terms of the Cash Alternative are detailed below.

Completion of the Transaction remains subject to a number of conditions and approvals, including, but not limited to the approval of the Toronto Stock Exchange, shareholders of both Tenaz and SDX, and the applicable UK court. The addition of the Cash Alternative is not expected to create material delay to the timing of the shareholder votes or closing of the Transaction. It is expected that Tenaz and SDX will hold shareholder meetings to approve the Transaction in July 2022. Based on progress to date regarding required regulatory clearances, the parties are currently targeting closing of the Transaction between August and October 2022. Tenaz and SDX have also received UK regulatory approval to amend the longstop date for the Transaction to December 31, 2022. The previous longstop date was May 24, 2023.

In recognition of the possibility that some SDX shareholders may prefer cash to receiving equity, Tenaz will make the Cash Alternative available to all SDX shareholders on the following terms:

• Each SDX shareholder retains the right to convert up to 100% of SDX Shares held to Tenaz Shares at the previously announced exchange ratio of 0.075 Tenaz Shares for each SDX Share.
• Each SDX shareholder will have the opportunity to elect to receive 11 pence per SDX Share for any or all of their SDX Shares, in cash and in lieu of receiving Tenaz Shares for the cash settled portion. SDX shareholders who elect to receive a portion of the Transaction proceeds in cash will have the remainder of their SDX Shares converted to Tenaz Shares.
• If no election is made within the election period, SDX shareholders will receive their consideration in the form of Tenaz shares at the previously announced exchange ratio of 0.075 Tenaz Shares for each SDX Share.

The following tables describe the pro forma percent ownership and per share accretion metrics* at various Cash Alternative election levels:

* This is a non-GAAP and other financial measure. Refer to “Non-GAAP and Other Financial Measures” included in the “Advisories” section of this press release.

To the extent that current SDX shareholders elect to receive cash in lieu of Tenaz Shares, it is anticipated that accretion to existing Tenaz shareholders will increase.

In order to provide the Cash Alternative, Tenaz will use its existing cash balance, supplemented by a reserve-based credit facility from ATB Financial. Further details of the credit facility will be provided in the information circular to be mailed to shareholders of Tenaz. If there is full uptake of the Cash Alternative by SDX shareholders, approximately C$35.8 million would be utilized as cash consideration to SDX shareholders. As at March 31, 2022Tenaz held a cash balance of approximately C$21.8 million.As at March 31, 2022SDX held approximately C$15.2 million in cash, and an additional C$16.5 million in non-cash net working capital*.

* This is a non-GAAP and other financial measure. Refer to “Non-GAAP and Other Financial Measures” included in the “Advisories” section of this press release.

The Cash Alternative

SDX Shareholders may elect to receive cash instead of some or all of the New Tenaz Shares to which they would otherwise be entitled to under the Combination.

Any SDX Shareholder who validly elects to…

Full story available on Benzinga.com

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