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SECURE Energy Announces First Public Credit Rating and Provides Update on Merger with Tervita Corporation

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CALGARY, AB, April 12, 2021 /CNW/ - SECURE Energy Services Inc. ("SECURE", the "Corporation") (TSX: SES) announced today that S&P Global Ratings ("S&P") has provided an initial issuer credit rating on the Corporation of "B" with a positive outlook following the merger announcement with Tervita Corporation ("Tervita") last month. This represents the Corporation's first public issuer credit rating and the S&P rating is expected to increase transparency and comparability for debt investors and other capital market participants.

On March 8, 2021, SECURE and Tervita entered into an arrangement agreement to combine in an all-share transaction, creating a stronger midstream infrastructure and environmental solutions business (the "Transaction"). Upon completion of the Transaction, pursuant to which SECURE will acquire all of the issued and outstanding common shares of Tervita (the "Tervita Shares") on the basis of 1.2757 common shares of SECURE (the "SECURE Shares") for each outstanding Tervita Share, SECURE and Tervita shareholders will own approximately 52% and 48%, respectively, of the combined company. The combined company will operate as SECURE and remain listed on the Toronto Stock Exchange ("TSX") as TSX: SES.

The Transaction combines highly complementary midstream infrastructure asset bases and environmental service lines, which are expected to materially enhance scale and utilization and provide operating efficiencies for the combined company's customers. Significant estimated annual integration cost savings of $75 million are expected to be realizable within 12 to 18 months after closing, contributing to the pro forma discretionary free cash flow profile.

Maintaining financial discipline will continue to be a key priority for SECURE following the close of the Transaction. The Corporation's strong pro forma financial position with attractive free cash flow generation is expected to provide increased flexibility for debt repayment and help achieve the combined company's target debt to EBITDA ratio of less than 2.5x, which is expected to be achieved within two years of closing.

Transaction Update

Shareholder Approval of Transaction

SECURE and Tervita expect to file a joint information circular (the "Circular") with respect to the securityholder approvals that are required for the Transaction in mid-May, 2021. The Circular will contain a detailed description of the Transaction and will be available on SEDAR at www.sedar.com as well as SECURE and Tervita's websites. All SECURE and Tervita shareholders are urged to read the Circular once available as it will contain important information concerning the Transaction.

The Transaction will require approval by holders of at least 66⅔ percent of holders of the Tervita Shares represented in person or by proxy at a special meeting of Tervita securityholders to be called to consider the Transaction (the "Tervita Meeting").

The issuance of the SECURE Shares pursuant to the Transaction will require approval by holders of a simple majority of SECURE Shares represented in person or by proxy at a special meeting of SECURE shareholders to be called to consider the issuance of SECURE Shares pursuant to the Transaction (the "SECURE Meeting").

The SECURE Meeting and Tervita Meeting are expected to take place on June 15, 2021, in virtual only formats which will be conducted via live audio webcast. Further information on how to attend the Meetings, along with voting instructions for shareholders of record on May 4, 2021, will be included in the Circular.

The Transaction is also subject to approval by the Alberta Court of Queen's Bench and the TSX, receipt of requisite approvals under the Competition Act (Canada), and other customary closing conditions being met, as well as the entering into of the previously-announced new credit facility by SECURE and its syndicate of lenders.

Initiation of Noteholder Consent Solicitation Process

Tervita has commenced a consent solicitation process to obtain certain consents from the holders of Tervita's outstanding US$500 million aggregate principal amount of 11% senior second lien secured notes due 2025 (the "Tervita Notes") to facilitate completion of the Transaction. For further information regarding the consent solicitation, please refer to the April 12, 2021, press release issued by Tervita, which can be found on SEDAR or at www.tervita.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as "forward-looking statements"). When used in this press release, the words "achieve", "enhance", "expect", "plan", "position", "priority", "realize", "result", "strategy", "target" and "will", and similar expressions, as they relate to SECURE or the combined company, or their respective management, are intended to identify forward-looking statements. Such statements reflect the current views of SECURE with respect to future events and operating performance and speak only as of the date of this press release.

In particular, this press release contains or implies forward-looking statements pertaining to: expectations with respect to the strength of the combined company; the relevance of SECURE's credit rating to debt investors and capital market participants; the pro forma equity ownership of the combined company; the complementary nature of the combined company's asset base and environmental solution business lines, and the ability to enhance scale, increase utilization, and improve operating efficiencies; expected annual integration cost savings of the combined company; the combined company's expected discretionary free cash flow profile; debt repayment plans; the ability to achieve the combined company' target debt to EBITDA ratio of less than 2.5x; anticipated closing conditions and regulatory approvals required pursuant to the Transaction; the meetings of each of SECURE's and Tervita's shareholders, including the record and meeting dates; the Circular prepared in connection therewith and the expected publication date thereof.

Forward-looking statements involve significant known and unknown risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to those factors referred to under the heading "Risk Factors" in our Annual Information Form for the year ended December 31, 2020, which is available on SEDAR at www.sedar.com.

Although forward-looking statements contained in this press release are based upon what the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements in this press release are expressly qualified by this cautionary statement. Unless otherwise required by law, SECURE does not intend, or assume any obligation, to update these forward-looking statements.

Credit ratings are intended to provide an independent measure of the credit quality of an issue of securities. The credit rating assigned by a rating agency is not a recommendation to purchase, hold or sell securities nor does the rating comment on market price or suitability for a particular investor. A rating may not remain in effect for any given period of time and may be revised or withdrawn entirely by a rating agency at any time in the future, if, in its judgment, circumstances so warrant. There can be no assurance that a credit rating will be maintained in the future. Downgrades in SECURE's credit rating could adversely affect SECURE's business, cash flows, financial condition, operating results and share and debt prices.

ABOUT SECURE

SECURE is a publicly traded energy business listed on the Toronto Stock Exchange providing industry leading customer solutions to upstream oil and natural gas companies operating in western Canada and certain regions in the United States through its network of midstream processing and storage facilities, crude oil and water pipelines, and crude by rail terminals located throughout key resource plays in western Canada, North Dakota and Oklahoma. SECURE's core midstream infrastructure operations generate cash flows from oil production processing and disposal, produced water disposal, and crude oil storage, logistics, and marketing. SECURE also provides comprehensive environmental and fluid management for landfill disposal, onsite abandonment, remediation and reclamation, drilling, completion and production operations for oil and gas producers in western Canada.

Website: www.secure-energy.com

TSX Symbol: SES

SOURCE SECURE Energy Services Inc.

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View original content: http://www.newswire.ca/en/releases/archive/April2021/12/c3661.html