AIMCo Announces Investment in Pine Cliff Energy
Edmonton, Alberta (August 10, 2016) – Alberta Investment Management Corporation (“AIMCo”) is pleased to announce that it has successfully entered into a strategic financing relationship with Pine Cliff Energy Ltd. (“Pine Cliff”) (TSX: PNE), on behalf of certain of its clients.
Pine Cliff is an Alberta-based energy producer focused on a low risk, natural gas asset consolidation strategy in Western Canada. The company offers one of the highest exposures to movements in natural gas pricing as a results of its low operating overhead, providing AIMCo’s clients with significant upside potential given the anticipated long-term rise in Alberta natural gas prices.
Based upon the terms of the financing relationship, Pine Cliff has completed a private placement of an aggregate of 30,000 Units to AIMCo at a price of $1,000 per Unit for aggregate gross proceeds of $30 million. Each Unit is comprised of: (i) one promissory note (a "Note") with a par value of $1,000 per Note and bearing interest at 6.75% per annum, which is payable semi-annually; and (ii) 150 common share purchase warrants ("Warrants").
The Notes mature on September 30, 2020 and all or a portion of the principal amount outstanding thereunder can be repaid without penalty after one year. Pine Cliff issued 4.5 million Warrants in connection with the private placement, with each Warrant entitling the holder to purchase one common share of Pine Cliff for $1.38 until August 10, 2018, which reflects a 45% premium to the 10-day weighted average trading price of the common shares of the Company prior to closing of the private placement.
“AIMCo’s investment teams are steadfast in their pursuit of opportunities that will generate long term value, on behalf of our clients," states Dale MacMaster, AIMCo Chief Investment Officer. “We are pleased to secure this investment in Pine Cliff Energy, a resilient Alberta-based company, and believe that the combination of Pine Cliff’s strong management team, stable production base and below-average financial leverage will be rewarded by markets over time.”
Philip B. Hodge, President and CEO of Pine Cliff Energy adds, “AIMCo is a global institutional investor with a keen understanding of Alberta’s economy and potential. We take great pride in the vote of confidence that their investment in our company signals to the market.”