Stoneway Capital Corporation and Mezzanine Lenders Amend the Terms of New Notes and the Restructuring Support Agreement Entered into with Ad Hoc Group of Noteholders to Effect the Restructuring of Existing Notes

- November 20th, 2020

Stoneway Capital Corporation and an ad hoc group of note holders holding a substantial majority of 10.000% Senior Secured Notes due 2027 issued by Stoneway have agreed to certain amendments to the previously disclosed restructuring support agreement, dated as of September 21, 2020 including with respect to certain of the proposed terms of the Company’s new notes to be issued in connection with the Company’s proposed …

Stoneway Capital Corporation (” Stoneway, ” and together with its subsidiaries and parent entities, the ” Company “) and an ad hoc group of note holders (the ” Consenting Holders “) holding a substantial majority of 10.000% Senior Secured Notes due 2027 (the ” Existing Notes “) issued by Stoneway have agreed to certain amendments to the previously disclosed restructuring support agreement, dated as of September 21, 2020 (together with the Restructuring Term Sheet included as an exhibit thereto, the ” Existing Restructuring Support Agreement “), including with respect to certain of the proposed terms of the Company’s new notes (the ” New Notes “) to be issued in connection with the Company’s proposed restructuring transaction (the ” Transaction “) (such proposed amendments, the ” Amended Terms “).  The Company intends to issue a supplement (the ” Second Circular Supplement “) to its Management Information Circular dated October 13, 2020 (as supplemented on November 2, 2020 the ” Circular “) in respect of the Amended Terms.  The Transaction is to be implemented pursuant to the Company’s previously disclosed plan of arrangement dated October 14, 2020 (as amended on November 2, 2020 and as further amended by the Amended Terms, the ” Plan “).

As previously announced in its October 8, 2020 news release, the Company obtained an interim order (the ” Interim Order “) from the Ontario Superior Court of Justice (Commercial List), authorizing among other things, the holding of a meeting (the ” Noteholders’ Meeting “) of holders (the ” Noteholders “) of the Company’s Existing Notes to consider and vote on the Plan under the Canada Business Corporations Act (the “CBCA “) to implement the Transaction.

The Restructuring Support Agreement

The terms and conditions of the Existing Restructuring Support Agreement have been amended by the Amended Terms pursuant to an amendment agreement (the ” Restructuring Support Agreement Amendment “), including the following changes:

  • The Voting Deadline, Plan Approval Date and Expiration Date (each, as defined in the Existing Restructuring Support Agreement), and certain other agreed milestones in connection with implementation of the Transaction, have been modified as follows:
    • Voting Deadline: November 27, 2020 (from November 12, 2020 )
    • Plan Approval Date: December 3, 2020 (from November 19, 2020 )
    • Expiration Date: January 7, 2021 (from December 24, 2020 ) or, if the Majority Members waive certain conditions relating to the appeal of the final order from the Ontario Superior Court of Justice (Commercial List) by no later than December 14, 2020 , then the Expiration Date is December 18, 2020 (from November 30, 2020 ).
  • Certain conditions precedent under the heading “Conditions Precedent” in the Restructuring Term Sheet shall be required to be satisfied or consummated on the Restructuring Effective Date rather than the Voting Deadline, including (i) receipt of executed copies in respect of certain shareholder arrangements; (ii) delivery of certain certifications by directors of Stoneway and its subsidiaries; (iii) consummation of the restructuring of certain local revolving credit facilities at the subsidiary level; and (iv) delivery of a draft term sheet (or range of terms) with respect to an EPC Contract between the Company and Siemens.

Description of New Notes

The description of the terms of the New Notes have been amended (the ” Amended Description of Notes “), including, in particular, as follows:

  • Stoneway and its guarantors are now required to report periodically in respect of certain governmental approvals and to add certain qualifiers and remediation obligations with respect to provisions relating to governmental approvals;
  • certain changes to the milestones and other provisions relating to the Approved EPC Contract; and
  • certain changes with respect to contracts with qualified operators.

The Second Circular Supplement will contain a complete description of the amendments described herein and amend certain statements made in the Circular in order to conform the Circular with the Restructuring Support Agreement Amendment and the Amended Description of Notes .

In the meantime, (i) a revised copy of the Summary of Restructuring Support Agreement and Summary of the Term Sheet (reflecting the Restructuring Support Agreement Amendment) and (ii) a copy of the Amended Description of Notes is available on Stoneway’s website through the Investors section at .

Changes to the Meeting and Voting

The Noteholders’ Meeting in respect of the Plan is now scheduled to be held on December 1, 2020 , virtually via live audio webcast, available online using the Zoom meeting platform. Registration must be completed prior to attending the Noteholders’ Meeting at . Pursuant to the Interim Order, the Noteholders’ Meeting is scheduled to begin at 10:00 a.m. ( Toronto time).

The deadline for the Noteholders to submit their proxies or voting instructions in order to vote on the Plan and other items to be considered at the Noteholders’ Meeting is 5:00 p.m. ( Toronto time) on November 27, 2020 (the ” New Voting Instructions Deadline “).

Banks, brokers or other intermediaries (each, an ” Intermediary “) that hold the Existing Notes on a Noteholder’s behalf may have internal deadlines that require Noteholders to submit their votes by an earlier date in advance of the New Voting Instructions Deadline, as applicable, and may have internal requirements for the submission of voting instructions.  Noteholders are encouraged to contact their Intermediaries directly to confirm any such internal deadline or voting instruction requirements.

Any questions or requests for further information regarding voting at the Noteholders’ Meeting should be directed to Kingsdale Advisors at 1-888-327-0825 or 416-867-2272, or by email at .

About Stoneway

The Company’s principal business is the construction, ownership and operation of power generation facilities located in Argentina.

For further information, please contact:

David Mack, Director

(212) 856-9700 (x06)

410 Park Avenue, Suite 900

New York, NY 10022

Juan I. Sánchez Alcázar, Chief Restructuring Officer

Av. Del Libertador 498, 15th floor

Buenos Aires (C1001ABR)


FORWARD LOOKING STATEMENTS: Certain information contained in this press release may contain forward looking statements within the meaning of applicable securities laws. The use of any of the words “continue”, “plan”, “propose”, “would”, “will”, “believe”, “expect”, “position”, “anticipate”, “improve”, “enhance” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this document contains forward-looking statements concerning: key terms of the Transaction;  the expected process and timing for implementing the Transaction; the holding and timing of, and matters to be considered at, the Noteholders’ Meeting as well as with respect to voting at the Noteholders’ Meeting; the deadlines for submitting proxies and voting instructions; the scheduling of the Noteholders’ Meeting; and the matters to be considered at and voted on the Noteholders’ Meeting; the relief to be sought in by the Company in its proceedings under the CBCA (the ” CBCA Proceedings “) in respect of the Plan; the completion of the Transaction, including with respect to obtaining any necessary approvals and satisfying any conditions and the expected timing thereof; the public posting of materials and information related to the Transaction; and the effect of the Transaction.

Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of the Company to implement the Transaction on the terms described in this press release and in previous announcements, the ability of Stoneway to receive all necessary court, third party and stakeholder approvals in order to complete the Transaction; the matters to be considered and voted on at the Noteholders’ Meeting; the ability of the Company to operate in the ordinary course during the CBCA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Company to continue as a going concern; the ability of the Company to continue to realize its assets and discharge its liabilities and commitments; the Company’s future liquidity position and access to capital to fund ongoing operations and obligations (including debt obligations); and the ability of the Company to stabilize its business and financial condition.

Although the Company bases its forward-looking statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this news release. Other unknown or unpredictable factors also could harm the Company’s future results. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as at the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

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SOURCE Stoneway Capital Corporation

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