Frontera Announces CAD$91 Million Substantial Issuer Bid, Plans to Return US$65 Million to Shareholders

Frontera Energy Corporation has announced a CAD$91 million (US$65 million) substantial issuer bid, offering to buy up to 7.58 million shares at CAD$12.00 per share. The offer will commence on May 29, 2025, and close on July 4, 2025. The board of directors believes the offer represents fair and equitable value for shareholders, and the company has returned approximately US$144 million to shareholders over the last 12 months.

Frontera Energy Corporation (TSX: FEC) has announced a substantial issuer bid to buy back up to 7,583,333 shares at CAD$12.00 per share, totaling CAD$91 million (US$65 million). The offer, approved by the board of directors, will commence on May 29, 2025, and close on July 4, 2025, unless extended or withdrawn [1].

The buyback represents a significant distribution to shareholders, with the offer expected to yield approximately 24.9% on the pre-announcement stock price. Over the past 12 months, Frontera has returned approximately US$144 million to shareholders through substantial issuer bids, dividends, and share repurchases [1].

Orlando Cabrales, CEO of Frontera, commented, "With the successful ODL pipeline recapitalization now complete, Frontera is following through on its commitment to return significant value to its stakeholders by distributing CAD$91 million via this share buyback and up to an additional US$65 million via the recently announced tender offer and consent solicitation in respect of the Company's 7.875% Senior Secured Notes due 2028. These efforts are consistent with the Company's strategy of unlocking value and returning capital to its stakeholders" [1].

The company plans to fund the share repurchases with cash on hand and funds available through a recently closed US$220 million non-recourse secured credit facility. Shareholders may elect to receive payment in either Canadian or United States dollars. The offer is optional, and shareholders can choose whether to participate and how many shares to tender [1].

Upon completion of the offer, Frontera will have returned approximately US$144 million of capital to its shareholders over the last twelve months, including US$30 million from the October 2024 substantial issuer bid, US$30 million from the January 2025 substantial issuer bid, US$14.8 million in declared dividends, and US$3.6 million of share repurchases through the Company's normal course issuer bid program [1].

The board will continue to consider various strategic initiatives and/or transactions, including further capital returns, mergers, or business combinations. Frontera intends to file with the Toronto Stock Exchange a notice of intention to commence a normal course issuer bid for its shares following the completion of the offer [1].

References:
[1] https://finance.yahoo.com/news/frontera-announces-terms-cad-91-031400978.html