Just Energy Announces Granting of Reverse Vesting Order and Stay Extension -- EnergyChoiceMatters.com

Just Energy Announces Granting of Reverse Vesting Order and Stay Extension

November 3, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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Just Energy Group Inc. ('Just Energy' or the 'Company') today announced that the Ontario Superior Court of Justice (Commercial List) (the 'Court') has granted an order (the 'Reverse Vesting Order') that, among other things, (i) approves the transactions (the 'Transaction') provided for under the previously announced transaction agreement entered into on August 4, 2022 (as amended from time to time, the 'Transaction Agreement') among Just Energy and the lenders under the Company’s debtor-in-possession financing facility, one of their affiliates and the holder of certain assigned secured claims (collectively, the 'Purchaser'); and (ii) extends the stay period under the Companies’ Creditors Arrangement Act (the 'CCAA') to January 31, 2023 (the 'Stay Extension').

Just Energy said that the closing of the Transaction is currently expected to occur in December 2022, subject to the recognition of the Reverse Vesting Order in the Company’s Chapter 15 case in the Bankruptcy Court of the Southern District of Texas, Houston Division (the 'U.S. Court'), which will be sought on December 1, 2022, and the satisfaction or waiver of the other conditions to closing, including receipt of certain regulatory approvals. On the closing of the Transaction, the Purchaser will own all of the outstanding equity of Just Energy (U.S.) Corp., which will be the new parent company of all of the Just Energy Entities (as defined in the Transaction Agreement, other than those entities excluded pursuant to the terms of the Transaction Agreement), including the Company, and the Just Energy Entities will continue their normal business and operations in the ordinary course. All currently outstanding shares, options and other equity of Just Energy will be cancelled or redeemed for no consideration and without any vote of the existing shareholders. Under the Transaction, there will be no recovery for the Just Energy Entities’ general unsecured creditors, including the holders of Just Energy’s USD $205.9 million term loan (the 'Term Loan') and the holders of Just Energy’s 7.0% subordinated notes due September 15, 2026 (the 'Notes'), unless expressly classified as 'Assumed Liabilities' pursuant to the Transaction Agreement. Liabilities that will not be retained, including the Term Loan and the Notes, will be transferred to newly formed corporations (the 'ResidualCos'), along with excluded assets, under the Transaction Agreement. The Company expects that there will not be any recoveries available from the ResidualCos.

Implementation of the Transaction is subject to the condition that Just Energy, and the other Just Energy Entities, will have ceased to be a reporting issuer under any Canadian or U.S. securities laws, and that no Just Energy Entity will become a reporting issuer under any Canadian or U.S. securities laws as a result of completion of the Transaction. In connection with the completion of the Transaction, the Company intends to: (i) apply for an order from Canadian securities administrators that it will cease to be a reporting issuer under Canadian securities laws immediately prior to the effective date of the Transaction; and (ii) file to suspend its reporting obligations under U.S. securities laws. Additionally, the Company intends to submit an application to de-list its common shares from trading on the NEX on or before the closing of the Transaction. The Company’s common shares are also quoted on the OTC Pink Sheets. Concurrent with the delisting from the NEX, the Company expects that the common shares will cease trading on the OTC Pink Sheets.

The Stay Extension allows the Company to continue to operate in the ordinary course of business prior to closing the Transaction, Just Energy said

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