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CALGARY, Alberta, June 19, 2023 (GLOBE NEWSWIRE) — Razor Energy Corp. (“Razor”) (TSXV: RZE) in conjunction with FutEra Power Corp. (“FutEra”), is pleased to announce that it has completed the transactions contemplated by its previously announced debt settlement agreement with Alberta Investment Management Corporation, (“AIMCo”), on behalf of certain of its clients (the “Debt Settlement Agreement”), pursuant to which all obligations owing by Razor to AIMCo under the senior second amended and restated loan agreement dated February 16, 2021 have been settled through the transfer to AIMCo of equity interests held by Razor in its previously wholly-owned, non-listed subsidiary, FutEra.
For complete details, refer to the press releases of Razor dated May 1, 2023 and May 8, 2023 and Razor’s rights offering circular dated May 8, 2023, which are available on SEDAR.com.
The key components of the Debt Settlement Agreement are as follows:
- Razor has disposed of 70% of its common shares of FutEra and 100% of a class of newly created voting, convertible preferred shares in FutEra to settle $63.9 million of secured debt with AIMCo (the “FutEra Share Transfer”);
- Razor has retained 30% of its common shares of FutEra (subject to dilution upon preferred share conversion); and
- FutEra will be responsible for repayment of US$7.9 million of Razor’s current senior secured debt owed to Arena Investors, LP under Razor’s Second Amended and Restated Term Loan Agreement dated as of the date hereof.
As a condition to the completion of the transactions contemplated by the Debt Settlement Agreement, Razor has completed its previously announced rights offering (the “Rights Offering”) to eligible holders of Razor common shares (“Common Shares”) of record at the close of business on May 16, 2023 for aggregate gross proceeds of $4,011,856.80. In addition, pursuant to a standby purchase agreement dated May 1, 2023 between AIMCo and Razor (the “Standby Purchase Agreement”), AIMCo acquired 5,000,000 Common Shares and 5,000,000 Warrants (as defined below) for aggregate gross proceeds of $4,000,000 (the “Standby Commitment”).
The Rights Offering expired on June 7, 2023 with the rights (“Rights”) trading on the TSX Venture Exchange (“TSXV”) under the symbol “RZE.RT” being de-listed on that date. Each 2.022 Rights were exercisable for one unit (“Unit”) of Razor at the price of $0.80 per Unit (the “Subscription Price”), each Unit being comprised of one Common Share and one Common Share purchase warrant (“Warrant”). Each Warrant entitles its holder to purchase, subject to adjustment in certain circumstances, one Common Share at a price of $1.20 per Common Share for a period of five years from the date of issuance. The Warrants are expected to begin trading on the TSXV under the symbol “RZE.WT” effective June 20, 2023.
The Rights Offering received support from Razor’s shareholders with the exercise of 9,660,176 Rights available under the basic subscription privilege, resulting in the issuance of 4,777,527 Common Shares and 4,777,527 Warrants, and the exercise of 479,809 Rights available under the additional subscription privilege, resulting in the issuance of 237,294 Common Shares and 237,294 Warrants, for a combined total of exercise of 10,139,985 of Rights available under the Rights Offering and resulting in the issuance of 5,014,821 Common Shares and 5,014,821 Warrants.
Insiders of Razor, including AIMCo, exercised an aggregate of 4,879,585 Rights resulting in the issuance of 2,413,246 Common Shares and 2,413,246 Warrants to such insiders. In addition, AIMCo acquired 5,000,000 Common Shares and 5,000,000 Warrants pursuant to the Standby Purchase Agreement.
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