Petrowest announces $10 million bought deal financing; reaffirms 2016 adjusted EBITDA guidance

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CALGARY, April 7, 2016 /CNW/ - Petrowest Corporation ("Petrowest" or the "Company") (TSX:PRW) is pleased to announce that it has entered into an bought-deal financing with a syndicate of underwriters, co-led by Beacon Securities Limited and Dundee Securities Ltd., and including Haywood Securities Inc., PI Financial Corp., Mackie Research Capital Corporation, and Cormark Securities Inc., which have agreed to purchase from the Company, on a "bought deal" basis, 28,571,500 class A common shares of the Company ("Common Shares") at a price of $0.35 per Common Share for gross proceeds of $10,000,025 (the "Offering"). The Underwriters will have an option to purchase up to an additional 15% of the Common Shares issued under the Offering at a price of $0.35 per Common Share to cover over-allotments exercisable in whole or in part at any time until 30 days after the closing. In the event that the Over-Allotment Option is exercised in its entirety, the aggregate gross proceeds of the Offering will be C$11,500,028.75.  Certain officers and directors of Petrowest intend to participate by purchasing approximately 10% of the Common Shares issued under the Offering.

The net proceeds of the Offering will be used to reduce indebtedness and for general corporate and working capital purposes.

The Offering is scheduled to close on or about April 27, 2016 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.

The Common Shares will be offered by way of a short form prospectus to be filed in certain of the provinces of Canada pursuant to National Instrument 44-101 - Short Form Prospectus Distributions and in the United States to Qualified Institutional Buyers pursuant to exemptions from the registration requirements under rule 144A of the United States Securities Act of 1933, as amended, in a manner that does not require the common shares to be registered in the United States.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The Common Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Reaffirms 2016 Outlook
On January 18, Petrowest announced that it currently expects its base business and the Site C main civil works contract to achieve approximately $45 million in Adjusted EBITDA in 2016, which compares to approximately $11 million in 2015 and $35 million in 2014. In addition, 2016 is expected to bring numerous additional opportunities on the infrastructure development side which are further highlighted below.    

Additional Emerging Opportunities in 2016
Looking forward, 2016 presents Petrowest with a number of major industry events which include:

• Increased Western Canadian infrastructure activity, including both roadbuilding and civil construction, following the completion of both provincial and federal elections. Petrowest has been invited to bid on specific projects in Saskatchewan, Alberta and British Columbia, a number of which are anticipated to commence in the spring/summer of 2016;
• continued demand in the forestry industry driven component of the business partly due to a weakened Canadian dollar; and
• potential Final Investment Decision ("FID") on proposed future liquefied natural gas ("LNG") facilities in British Columbia. Petrowest has established firm working relationships with both companies that provide engineering and procurement services, as well as First Nations, in the area.

FORWARD LOOKING INFORMATION

Certain information and statements contained in this news release constitute forward-looking information, including the anticipated strong year of Adjusted EBITDA and a focus on decreasing the outstanding balance on the amortizing term loan throughout the year. Readers should review the cautionary statement respecting forward-looking information that appears below. Any forward-looking statements are made as of the date hereof and Petrowest does not undertake to publicly update and review such statements to reflect new events, subsequent events or otherwise, except to the extent events and circumstances have occurred that are reasonably likely to cause actual results to differ materially from material forward-looking information for a period that is not yet complete or as otherwise required by law.

The information and statements contained in this news release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as changes in industry conditions (including the levels of capital expenditures made by government agencies and companies undertaking infrastructure projects and oil and gas explorers and producers), the credit risk to which Petrowest is exposed in the conduct of its business, fluctuations in prevailing commodity prices or currency and interest rates, the competitive environment to which the various business divisions are, or may be, exposed in all aspects of their business, the ability of Petrowest's various business divisions to access equipment (including parts) and new technologies and to maintain relationships with key suppliers, the ability of Petrowest's various business divisions to attract and maintain key personnel and other qualified employees, various environmental risks to which Petrowest's business divisions are exposed in the conduct of their operations, inherent risks associated with the conduct of the businesses in which Petrowest's business divisions operate, timing and costs associated with the acquisition of capital equipment, the impact of weather and other seasonal factors that affect business operations, availability of financial resources or third-party financing and the impact of new laws or changes in administrative practices on the part of regulatory authorities. Forward-looking information respecting Adjusted EBITDA for 2016 and a focus on decreasing the outstanding balance on the amortizing term loan throughout the year is based on the current budget of Petrowest (which is subject to change), factors that affected the historical growth of Petrowest's business divisions, sources of historic growth opportunities and expectations relating to future economic and operating conditions including, without limitation, anticipated future growth opportunities.

Although management of Petrowest believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this news release. All of the forward looking statements of Petrowest contained in this news release are expressly qualified, in their entirety, by this cautionary statement. The various risks to which Petrowest is exposed are described under "Risk Factors" in Petrowest's Annual Information Form, available under Petrowest's profile on the SEDAR website at www.sedar.com.

ABOUT PETROWEST

Petrowest is an Alberta corporation involved in both industrial and civil infrastructure projects, as well as pre-drilling and post-completion energy services, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in northwestern Alberta and northeastern British Columbia.

SOURCE Petrowest Corporation