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Bellatrix plunges on proposal to trade debt for 83.5% of its equity value

CALGARY — Shares in Bellatrix Exploration Ltd. fell by as much as 35 per cent Friday after it proposed a deal that would leave its existing shareholders with just 16.5 per cent of the company.

The Calgary-based oil and gas producer says it intends to exchange US$146 million in senior unsecured notes due in 2020 for US$100 million in new debt maturing in 2023, plus common shares totalling 51 per cent of the company’s float.

It is also offering to trade $50 million in convertible debentures for another 32.5 per cent of its common shares following the recapitalization.

Bellatrix says the transactions — which are subject to approval by debtholders and court and regulatory authorities — would reduce its total outstanding debt by about $110 million to about $328 million and reduce annual interest payments by over $12 million.

Two weeks ago, the company warned investors that its ability to continue as a going concern was in doubt given a pending credit review and uncertainty about refinancing its senior notes.

It said its net loss in 2018 was $146 million, compared with a net loss of $91 million in 2017.

Fourth-quarter 2018 production was about 35,000 barrels of oil equivalent per day, 71 per cent natural gas, down six per cent from the same period of 2017.

Bellatrix shares, which traded as low as 40 cents on Friday morning, were down 9.5 cents at 44.5 cents in late-afternoon trading.

Companies in this article: (TSX:BXE)

The Canadian Press

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