Calfrac makes changes to recapitalization plan in an effort to woo shareholders

CALGARY — Calfrac Well Services Ltd. says its board has formally rejected a takeover offer by Texas-based Wilks Brothers LLC and made changes to its recapitalization plan in an effort to entice shareholders to back its proposal.

The company also has postponed a vote on its plan which was to take place Sept. 29 until Oct. 16.

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The recapitalization plan would see Calfrac unsecured notes exchanged for shares while the company's current shareholders would see their stake reduced.

Under the revised plan, shareholders are being offered the option to receive 15 cents per share up to a total of $10 million. Shareholders will also receive two warrants with an exercise price of five cents per share for each share they hold.

Wilks Brothers, which owns a nearly 20 per cent stake of Calfrac and opposes the recapitalization plan, has made an offer of 18 cents per share. Calfrac shares closed at 14.5 cents on Thursday.

Wilks Brothers urged shareholders Friday to reject the Calfrac management proposal.

"The amended management transaction does not change anything," the U.S. company said.

Calfrac's reorganization under the Canada Business Corporations Act must be supported by two-thirds of Calfrac's debtholders and shareholders in separate votes to proceed.

This report by The Canadian Press was first published Sept. 25, 2020.

Companies in this story: (TSX:CFW)

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