HARVEST ENERGY TRUST company history: the story so far

History

Harvest Energy Trust bought North Atlantic and its refining businesses, raised C$250 million of convertible debt in 2008, and by January 2010 was moving through an arrangement with Korea National Oil Corporation.

2006-2008: Buying North Atlantic and borrowing to grow

Harvest Energy Trust, a Calgary-based trust whose units traded on the Toronto and New York exchanges, set out in late 2006 to expand. In December 2006 it filed a Business Acquisition Report covering the purchase of North Atlantic and the related refining and marketing businesses. The filing gave no price or terms. Around the same time Harvest arranged a $450,000,000 bridge credit agreement (a short-term loan) and an amended credit agreement, and announced unit financings in November 2006 and January 2007. The terms of those financings were never given in the filings seen. Unit financings closed in June 2007.

In April 2008 Harvest announced, then closed, a C$250 million convertible debenture financing. Convertible debentures are debt that can be swapped for trust units, which could dilute existing unitholders if converted. The interest rate and conversion price were not given. Harvest's first quarter 2008 results showed a continued C$0.30 monthly distribution to unitholders. In October 2008 it announced a normal course issuer bid, a program to buy back units and convertible debentures, though its size was not stated. A further unit financing closed in June 2009.

2009-2010: The Korea National Oil Corporation arrangement

In December 2009 securityholders met on a plan of arrangement with Korea National Oil Corporation. The meeting was held on December 15, and the court approved the arrangement on December 16. The filings did not say what price was paid or what unitholders would receive.

On January 20, 2010, Harvest announced an offer to purchase its outstanding debentures and senior notes, and confirmed its directors and executive management, with John Zahary as President and CEO. The filing gave no price or amounts, and the offer appears to follow the arrangement, though that link is inferred from timing. As of January 21, 2010, the closing of the arrangement, what unitholders receive, and the outcome of the debt offer all remained open.

Written from the 5 story beats below (2006 to 21 Jan 2010), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

2010

21 Jan
Harvest announced an offer to purchase its outstanding debentures and senior notes, and confirmed its directors and executive management, in a January 20, 2010 news release. This follows the arrangement with Korea National Oil Corporation approved in December 2009 (the link is an inference from timing). The cover form gives no price, amounts or names.
debt financing

2009

17 Dec
Harvest filed the materials for a December 15, 2009 special meeting of securityholders on a plan of arrangement, with news releases announcing the meeting results and court approval on December 16, 2009 for the planned arrangement with Korea National Oil Corporation. The cover form does not give the price or what unitholders receive, so their outcome is not yet clear from this filing.
business combination

2008

12 May
Harvest filed documents including an April 25, 2008 news release announcing the closing of the C$250 million convertible debenture financing, which completes the offering announced in April. It also lists first quarter 2008 results with a continued C$0.30 monthly distribution and amendments to long term incentive plans.
debt financing
8 Apr
Harvest announced a C$250 million convertible debenture financing in an April 7, 2008 news release. This adds new debt that can be converted into trust units, which could dilute unitholders if converted. The cover form does not give the interest rate or conversion price.
debt financing

2006

29 Dec
Harvest filed its Business Acquisition Report (first filed December 11, 2006) covering the acquisition of North Atlantic and the related refining and marketing businesses. This appears to be the deal the late-2006 bridge credit and the trust unit and debenture financing were connected to (an inference from timing, not stated in the filing). The cover form gives no price or other deal terms.
business combination