Terrace Energy to exchange convertibles, guarantee claim for shares

By Taylor Fox

New York, Feb. 25 – Terrace Energy Corp. announced a proposed plan of arrangement under the Business Corporations Act under which its C$33.47 million outstanding convertible secured notes due April 2021 and a guarantee claim of C$500,000 will be exchanged for newly issued common shares, according to a news release.

Terrace plans to hold a special meeting at 1 p.m. ET March 29 for holders of the notes and a certain holder of a guarantee claim to consider and vote upon a resolution approving the arrangement.

Under to the arrangement, noteholders will receive 20,000 common shares for each C$1,000 of notes held and the guarantee holder will receive 20,000 common shares for each C$1,000 of the guarantee claim.

Only principal amounts outstanding under the notes and the guarantee claim will be exchanged, and other accrued amounts, including interest and any maturity bonus, will be canceled.

After giving effect to the arrangement, the noteholders and the guarantee holder are expected to receive, in total, 682,084,000 common shares, which will represent 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, Feb. 16.

As a result of approval requirements of the TSX Venture Exchange, 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 a majority in number of the noteholders and the guarantee holder and 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.

Terrace is an oil and gas explorer based in Vancouver, B.C.

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