Demand for payment provides Savanna with 5 business days to pay termination fee
Western Energy Services Corp. announced it issued a formal demand for payment to Savanna Energy Services Corp. for payment of a termination fee in the amount of $20,000,000 in respect of the arrangement contemplated by between Western and Savanna, according to a Western Energy Services press release.
Western says the termination fee was an incentive for Western to forego other opportunities, incur considerable financial expense and spend significant time and effort to advance the Western Arrangement, including performing “due diligence” reviews in Canada, the United States and Australia.
They claim the fee was also for working to negotiate and finalize a mutually acceptable transaction with Savanna, developing a strategic plan for the proposed combined entity and engaging with the investment community, Western’s lenders, customers and others to describe and explain the proposed Western Arrangement.
The termination fee also provided Western with security that Savanna would complete the transaction contemplated by the arranged agreement.
Savanna provided Western with a notice of termination of the arranged agreement on March 28, 2017.
In a separate press release, Savanna says there is no basis for the claim made by Western in the notice and intends to vigorously defend any claim made by Western for payment of the termination fee.
Western does not consider Savanna to have been entitled to terminate the agreement in the circumstances and considers Savanna to have breached certain covenants under the agreement.
Western also believes that it’s entitled to damages including fee provided for under the arrangement agreement.
Western’s demand for payment provides Savanna with five business days in which to pay the termination fee.
If Savanna fails to make payment promptly, Western will instruct its legal counsel to commence litigation by filing a statement of claim against Savanna to recover the amount of the termination fee and other remedies.