AKITA Drilling Ltd. and Xtreme Drilling Corp. Announce Shareholder and Court Approval of Plan of Arrangement

Source Press Release
Company Akita Drilling Ltd 
Tags Corporate Deals, Deals, Oil Services
Date August 15, 2018

AKITA Drilling Ltd. (TSX:AKT.A; TSX:AKT.B) and Xtreme Drilling Corp. (TSX:XDC) are pleased to announce that yesterday they received the approval of the Court of Queen's Bench of Alberta for the previously announced plan of arrangement (the "Arrangement") under the Business Corporations Act(Alberta) (the "Act") pursuant to which AKITA will acquire all of the issued and outstanding common shares of Xtreme (the "Xtreme Shares").

At the Xtreme special meeting of shareholders held on August 13, 2018, the Arrangement was approved by 99.87% of the votes cast by Xtreme shareholders who voted on the Arrangement. 

Pursuant to the Arrangement, Xtreme shareholders will receive 0.3732394 of a Class A Non-Voting Share of AKITA (the "AKITA Non-Voting Shares") or $2.65 in cash for each Xtreme Share held and were able to elect to receive AKITA Non-Voting Shares, cash or a combination of AKITA Non-Voting Shares and cash, in each case subject to proration such that the aggregate consideration to be paid by AKITA will not exceed $45,000,000 in cash and will not exceed 22,235,458 AKITA Non-Voting Shares (the "Share Maximum").

Pursuant to Section 611(c) of the TSX Company Manual, the number of AKITA Non-Voting Shares issuable under the Arrangement exceeds 25% of the AKITA Non-Voting Shares which are issued and outstanding, and as such, the TSX requires Akita shareholder approval for the issuance. AKITA has obtained that shareholder approval by obtaining written consent from Sentgraf Enterprises Ltd. ("Sentgraf"), who holds 86.3% of the Class B Common Shares of AKITA (the "AKITA Voting Shares").

Following the completion of the Arrangement, Sentgraf will continue to hold the same number and percentage of AKITA Voting Shares.

Today, Sentgraf sent written confirmation to the TSX indicating that they are familiar with the material terms and conditions of the Arrangement and approves of the issuance of up to 22,235,458 AKITA Non-Voting Shares pursuant to the Arrangement.

Following the completion of the Arrangement, on a fully diluted basis and taking into account the elections that have been made by Xtreme Shareholders prior to the election deadline provided for under the Arrangement, holders of AKITA Non-Voting Shares immediately following the completion of the Arrangement will hold approximately 16,291,877 AKITA Non-Voting Shares, representing approximately 43% of the then issued and outstanding AKITA Non-Voting Shares on the date the Arrangement becomes effective under the Act (the "Effective Date"), assuming that no Xtreme options or Xtreme restricted share units are converted into Xtreme Shares prior to the Effective Date). Taking into account the elections that have been made by Xtreme Shareholders prior to the election deadline  provided for under the Arrangement, the issuance of AKITA Non-Voting Shares pursuant to the Arrangement would result in a dilution of approximately 133% of existing AKITA Non-Voting Shares.

No insider of AKITA has any interest, direct or indirect, in the transactions contemplated by the Arrangement Agreement. The transactions contemplated by the Arrangement Agreement will not materially affect control of AKITA. Xtreme is an arm's-length party to AKITA and the Arrangement Agreement was negotiated at arm's length.

Closing of the Arrangement remains subject to closing conditions customary in transactions of this nature, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Arrangement is expected to occur in the third quarter of 2018.  Complete details of the terms of the transaction are set out in the arrangement agreement, which will be filed and available for viewing on SEDAR under each of AKITA and Xtreme's profiles at .

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd