SOU Southern Energy Corporation

Laurentian Bank Securities Inc. ("LBS") has acquired from treasury 8% convertible unsecured subordinated debentures (the "Debentures") of Southern Energy Corp. (TSXV: SOU) (the "Issuer" or "Southern") which are convertible into common shares in the capital of Southern (the "Common Shares").  On June 14, 2019, Southern completed its previously announced acquisition of high quality, low decline natural gas assets in the State of Mississippi for cash consideration of US$16.5 million ($22.0 million), subject to customary adjustments (the "Acquisition").  Concurrent with the completion of the Acquisition, Southern closed its previously announced "best efforts" convertible debenture private placement (the "Financing") with a syndicate of agents co-led by LBS.  Pursuant to the Financing, LBS acquired as principal $3,000,000 principal amount of Debentures at a price of $1,000 per Debenture for total consideration of $3,000,000.  In addition, in consideration for acting as co-lead agent in the Financing, LBS received a commission fee payable in Debentures, in the amount $140,000 principal amount of Debentures.  In aggregate, LBS acquired $3,140,000 principal amount of Debentures.

The Debentures were issued pursuant to the terms of a debenture indenture (the "Debenture Indenture") between Southern and Computershare Trust Company of Canada (the "Trustee"). The Debentures will mature and be repayable on June 30, 2022 (the "Maturity Date"). Each Debenture will be convertible into Common Shares at any time prior to the close of business on the earlier of the business day immediately preceding, (i) the Maturity Date, or (ii) if called for redemption, the date specified for redemption by Southern, at a conversion price of $0.125 per Common Share, subject to adjustment in certain events. This represents a conversion rate of 8,000 Common Shares for each $1,000 principal amount of Debentures.

Prior to the Financing, LBS owned, controlled or directed (directly or indirectly) 16,616,500 Common Shares, representing approximately 7.426% of the Issuer’s outstanding Common Shares. Immediately following the Financing, LBS now owns, controls or directs (directly or indirectly), (i) 16,616,500 Common Shares, representing approximately 7.426% of the Issuer’s outstanding Common Shares and (ii) $3,140,000 principal amount of Debentures.  On a post-conversion basis, LBS would own, control or direct (directly or indirectly) 41,736,500 Common Shares representing approximately 16.77% of the Issuer’s outstanding Common Shares on a partially-diluted basis.     

LBS acquired the securities of Southern referred to herein for investment purposes. LBS may from time to time in the future increase or decrease its ownership, control or direction over the securities of Southern, through market transactions, private agreements or otherwise.   

This press release is issued pursuant to early warning requirements of National Instrument 62-104 and National Instrument 62-103, which also requires a report to be filed with regulatory authorities in each of the jurisdictions containing additional information with respect to the foregoing matters (the "Early Warning Report").

The address of the Issuer is Suite 2400, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1. A copy of the Early Warning Report will be available under the Issuer’s SEDAR profile at www.SEDAR.com.

LBS is an integrated full-service investment dealer, focusing on six lines of business. The Institutional Fixed Income division has a presence in Government and Corporate underwritings, as well as in secondary markets.  In addition, the Institutional Equity division focuses on serving clients through research, trading and investment banking in the small capitalization sector. The Retail division and Discount Brokerage division currently serve clients through its offices in Quebec. Furthermore, as a carrying broker, LBS provides complete back office support to a wide range of customers. LBS also offers an Immigrant Investors program. LBS is a corporation existing under the federal laws of Canada.

Laurentian Bank Securities Inc.Suite 620, 1360 Rene-Levesque Blvd. West Montreal, Quebec H3G 0E8

 

Cameron Baker, CFA, M.iM. Managing Director, Head of Equities and SyndicationT 514 350-2829 4