(Frontera, 16.Oct.2019) — Frontera Energy Corporation accepted its notice to renew its normal course issuer bid (the NCIB) for its common shares.
Pursuant to the NCIB, Frontera may purchase up to 6,532,400 Common Shares during the twelve-month period commencing October 18, 2019 and ending October 17, 2020, representing approximately 10% of the Company’s “public float” (as such term is defined by the policies of the TSX) as at October 7, 2019. As at October 7, 2019, there were 97,957,506 Common shares issued and outstanding of which 65,324,003 constitute the “public float”, calculated in accordance with the rules of the TSX. There are no persons acting jointly or in concert with the Company in respect of the NCIB.
The average daily trading volume of Frontera’s Common Shares was 203,258 Common Shares over the period between April 1, 2019 and September 30, 2019. Consequently, daily purchases through the facilities of the TSX will be limited 50,814 common shares, other than block purchase exceptions.
Frontera believes that, from time to time, the market price of its Common Shares may not fully reflect the underlying value of its business and future prospects and financial position. In such circumstances, Frontera may purchase for cancellation outstanding Common Shares, thereby benefitting all shareholders by increasing the underlying value of the remaining Common Shares.
In connection with its NCIB, Frontera has entered into an automatic share purchase plan (the “Plan“) with its designated broker, CIBC World Markets, to facilitate the purchase of Common Shares under the NCIB at times when Frontera would ordinarily not be permitted to purchase its Common Shares due to regulatory restrictions and customary self-imposed blackout periods. Outside of the restricted periods, the timing of purchases will be determined by management of the Company. The Plan has been pre-cleared by the TSX and will be implemented at the time the NCIB commences.
Purchases subject to the NCIB will be carried out pursuant to open market transactions through the facilities of the TSX or alternative trading systems, if eligible, by CIBC World Markets on behalf of Frontera in accordance with the Plan and applicable regulatory requirements. The price to be paid by Frontera for any Common Share will be the market price at the time of acquisition, plus brokerage fees, or such other price as the TSX may permit. All Common Shares purchased by Frontera under the NCIB will be returned to treasury and cancelled.
The indenture, dated as of June 25, 2018, as amended, pursuant to which US$350 million aggregate principal amount of 9.70% senior notes of the Company due 2023 were issued (the “Indenture“), imposes certain restrictions on the Company’s ability to repurchase its Common Shares. However, based on other provisions of the Indenture, the Company expects that it will not be restricted from completing the purchases under the NCIB.
Under its normal course issuer bid that expired on July 17, 2019, Frontera was authorized to repurchase for cancellation 5,000,583 Common Shares and Frontera purchased for cancellation 2,684,605 Common Shares between July 18, 2018 and July 17, 2019 at a volume weighted average price of $13.6835 per share, excluding brokerage fees. Purchases were made on the open market.