/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
CALGARY,
Aug. 15, 2018 /CNW/ - AKITA Drilling
Ltd. (TSX:AKT.A; TSX:AKT.B) and Xtreme Drilling Corp. (TSX:XDC) are
pleased to announce that yesterday they received the approval of
the Court of Queen's Bench of Alberta for the previously announced plan of
arrangement (the "Arrangement") under the Business
Corporations Act (Alberta)
(the "Act") pursuant to which AKITA will acquire all of the issued
and outstanding common shares of Xtreme (the "Xtreme
Shares").
At the Xtreme special meeting of shareholders held on
August 13, 2018, the Arrangement was
approved by 99.87% of the votes cast by Xtreme shareholders who
voted on the Arrangement.
Pursuant to the Arrangement, Xtreme shareholders will receive
0.3732394 of a Class A Non-Voting Share of AKITA (the "AKITA
Non-Voting Shares") or $2.65 in
cash for each Xtreme Share held and were able to elect to receive
AKITA Non-Voting Shares, cash or a combination of AKITA Non-Voting
Shares and cash, in each case subject to proration such that the
aggregate consideration to be paid by AKITA will not exceed
$45,000,000 in cash and will not
exceed 22,235,458 AKITA Non-Voting Shares (the "Share
Maximum").
Pursuant to Section 611(c) of the TSX Company Manual, the number
of AKITA Non-Voting Shares issuable under the Arrangement exceeds
25% of the AKITA Non-Voting Shares which are issued and
outstanding, and as such, the TSX requires Akita shareholder
approval for the issuance. AKITA has obtained that shareholder
approval by obtaining written consent from Sentgraf Enterprises
Ltd. ("Sentgraf"), who holds 86.3% of the Class B Common
Shares of AKITA (the "AKITA Voting Shares").
Following the completion of the Arrangement, Sentgraf will
continue to hold the same number and percentage of AKITA
Voting Shares.
Today, Sentgraf sent written confirmation to the TSX indicating
that they are familiar with the material terms and conditions of
the Arrangement and approves of the issuance of up to 22,235,458
AKITA Non-Voting Shares pursuant to the Arrangement.
Following the completion of the Arrangement, on a fully diluted
basis and taking into account the elections that have been made by
Xtreme Shareholders prior to the election deadline provided for
under the Arrangement, holders of AKITA Non-Voting Shares
immediately following the completion of the Arrangement will hold
approximately 16,291,877 AKITA Non-Voting Shares, representing
approximately 43% of the then issued and outstanding AKITA
Non-Voting Shares on the date the Arrangement becomes effective
under the Act (the "Effective Date"), assuming that no
Xtreme options or Xtreme restricted share units are converted into
Xtreme Shares prior to the Effective Date). Taking into account the
elections that have been made by Xtreme Shareholders prior to the
election deadline provided for under the Arrangement, the
issuance of AKITA Non-Voting Shares pursuant to the Arrangement
would result in a dilution of approximately 133% of existing AKITA
Non-Voting Shares.
No insider of AKITA has any interest, direct or indirect, in the
transactions contemplated by the Arrangement Agreement. The
transactions contemplated by the Arrangement Agreement will not
materially affect control of AKITA. Xtreme is an arm's-length party
to AKITA and the Arrangement Agreement was negotiated at arm's
length.
Closing of the Arrangement remains subject to closing conditions
customary in transactions of this nature, including approval under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
Arrangement is expected to occur in the third quarter of
2018. Complete details of the terms of the transaction are
set out in the arrangement agreement, which will be filed and
available for viewing on SEDAR under each of AKITA and Xtreme's
profiles at www.sedar.com.
ABOUT AKITA
AKITA is an Alberta corporation
engaged in the contract drilling business in Western Canada, the North, and the Permian
Basin. The Company was an early adopter of pad rig technology and
currently enjoys a dominant market share in heavy oil operations,
with pad rigs making up approximately one-half of its deep capacity
fleet. AKITA has been a pioneer among drilling companies in forming
mutually beneficial joint ventures with the First Nations, Inuit
and Metis people living proximate to areas of concentrated oil and
gas development. The Company recently celebrated its 25th
anniversary as a public company and is listed on the Toronto Stock
Exchange under the symbol AKT. More information about AKITA can be
found at http://www.akita-drilling.com.
ABOUT XTREME
Xtreme Drilling Corp. ("XDC" on the Toronto Stock Exchange)
designs, builds, and operates a fleet of high specification AC
drilling rigs featuring leading-edge proprietary technology.
Currently, Xtreme operates one service line - Drilling Services
(XDR) under contracts with oil and natural gas exploration and
production companies and integrated oilfield service providers in
the United States. For more
information about the Company, please visit
http://www.xtremedrillingcorp.com.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy the shares in any jurisdiction. The
shares offered will not be and have not been registered under the
United States Securities Act of 1933 and may not be offered or sold
in the United States or to a
United States person, absent
registration, or an applicable exemption therefrom.
CURRENCY
All amounts are stated in Canadian dollars unless otherwise
noted.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking information
(collectively referred to herein as "forward-looking statements")
within the meaning of applicable Canadian securities laws.
Forward-looking statements are often, but not always, identified by
the use of words such as "anticipate", "believe", "plan",
"potential", "intend", "focus", "estimate", "expect", "may",
"will", "could", "should", or similar words suggesting future
outcomes.
More particularly, this press release contains statements
concerning the proposed combination including the impact of the
combination on AKITA and AKITA's plans, the timing and anticipated
dates related to the satisfaction of all parties to the conditions
to closing of the combination, the anticipated closing time of the
combination and the effect and benefits of the combination..
The completion and timing of the combination are based on a
number of assumptions, including regulatory approvals for the
combination and the satisfaction of other closing conditions in
accordance with the terms of the Arrangement Agreement. The
forward-looking statements contained in this document are based on
certain key expectations and assumptions made by AKITA and Xtreme
relating to the successful completion of the combination,
prevailing commodity prices, the demand for drilling rigs and other
oilfield services and the continued availability of capital and
skilled personnel. Although AKITA and Xtreme consider these
assumptions to be reasonable based on information currently
available, undue reliance should not be placed on the
forward-looking statements because AKITA and Xtreme can give no
assurance that they may prove to be correct.
Completion of the combination could be delayed if parties are
unable to obtain the necessary regulatory and stock exchange
approvals on the timeline planned. The combination will not be
completed if all of these approvals are not obtained or some other
condition of closing is not satisfied. Accordingly, there is a risk
that the combination will not be completed within the anticipated
time or at all.
By their very nature, forward-looking statements are subject to
certain risks and uncertainties (both general and specific) that
could cause actual events or outcomes to differ materially from
those anticipated or implied by such forward-looking statements.
The forward-looking statements contained in this press release are
made as of the date hereof and AKITA and Xtreme do not undertake
any obligation to update publicly or to revise any of the included
forward-looking statements, except as required by applicable law.
The forward-looking statements contained herein are expressly
qualified by this cautionary statement.
SOURCE AKITA Drilling Ltd.