VANCOUVER, BC, Feb. 25, 2021 /CNW/ - Terrace Energy
Corp. (the "Company") (TSXV: TZR) announces a
proposed Plan of Arrangement (the "Arrangement") under the
the Business Corporations Act (British Columbia), pursuant to which its
outstanding convertible secured notes due in April 2021 (the "Notes"), of which
$33,470,000 in aggregate principal
amount was outstanding as of February 16,
2021 (being the record date of the Meeting (as defined
below)) and a guarantee claim in the amount of US$500,000 will be exchanged for newly issued
common shares (the "Common Shares") on the basis of 20,000
Common Shares for each $1,000 of
principal amount outstanding under the Notes and the guarantee
claim.
Meeting of Noteholders and Guarantee Claim Holder
The Company plans to hold a special meeting (the
"Meeting") of holders of the Notes and certain holder of a
guarantee claim (the "Guarantee Holder") to approve the
Arrangement. The Meeting will be held at 10:00 a.m. (Vancouver time) on March 29, 2021. At the Meeting, noteholders, and
the holder of the guarantee claim, will be asked to consider and
vote upon a resolution approving the Arrangement.
The Arrangement
Pursuant to the Arrangement, among other things, noteholders
will receive 20,000 Common Shares for each $1,000 principal amount of Notes held by such
noteholder and the Guarantee Holder will receive 20,000 Common
Shares for each $1,000 principal
amount of the guarantee claim. Only principal amounts outstanding
under the Notes and the guarantee claim are being exchange and
other accrued amounts, including interest and any maturity bonus
are being cancelled pursuant to the Arrangement.
After giving effect to the Arrangement, the Noteholders and the
Guarantee Holder are expected to receive, in the aggregate,
682,084,000 Common Shares which will represent approximately 87% of
the issued and outstanding common shares of the Company based on
the number of issued and outstanding common shares as at the record
date of the Meeting (as defined below), being February 16, 2021. As a result of approval
requirements of the TSX Venture Exchange (the "TSX-V"), the
deemed price of the Common Shares under the Arrangement is
$0.05 per share.
The Arrangement is subject to court approval and approval by
both (i) a majority in number of the aggregate number of
noteholders and the Guarantee Holder; and (ii) noteholders and the
Guarantee Holder representing 75% in the aggregate value of the
Notes and the guarantee claim present, in person or by proxy, at
the Meeting. The Arrangement will also be subject to customary
conditions, including, among other things, the receipt of
applicable regulatory approvals, including approval of the TSX-V
and the satisfaction of other customary closing conditions.
Details regarding these and other terms of the Arrangement will
be set out in a management information circular, which will be sent
to noteholders and made available under the Company's profile at
www.sedar.com prior to the Meeting.
"Dave Gibbs"
Dave Gibbs, CEO
Cautionary Statement and Forward-Looking Information
This press release includes forward-looking information and
forward-looking statements (together, "forward-looking
information") within the meaning of applicable Canadian and
United States securities
laws. Forward-looking information includes
statements: regarding the Company's beliefs and expectations
regarding the completion and/or timing of the transactions
contemplated under the Arrangement. Users of forward-looking
information are cautioned that actual results may vary from the
forward-looking information disclosed in this press release. The
material risk factors that could cause actual results to differ
materially from the forward-looking information contained in this
press release include: the risk that the Company will be
unable to obtain all necessary court, noteholder and Guarantee
Holder,, regulatory or other approvals for the Arrangement;
and other risks and uncertainties described in the documents
filed with Canadian securities regulators at www.sedar.com. Readers
are cautioned that the assumptions used in the preparation of
forward-looking information, although considered reasonable at the
time of preparation, may prove to be imprecise and, as such, undue
reliance should not be placed on forward-looking information. The
material assumptions used to develop the forward-looking
information include: that the Company will obtain all necessary
consents and approvals, including any necessary court, noteholder
and Guarantee Holder and/or regulatory approval, including the
TSX-V for the Arrangement; and that other conditions under the plan
of arrangement will be fulfilled or
waived. The Company does not assume the
obligation to update any forward-looking information, except as
required by applicable law.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE. SOURCE Terrace Energy Corp.
SOURCE Terrace Energy Corp.