Just Energy Group Inc.

September 12, 2018

Decision

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – relief from the requirements applicable to issuer bids in Part 2 of NI 62-104 in connection with offer by issuer to repurchase convertible Eurobonds – issuer unable to rely on exemption in s. 4.10 of NI 62-104 as Canadian bondholders beneficially own more than 10% of the issuer’s Eurobonds – offer will be made in compliance with applicable securities laws of the United Kingdom – Eurobonds not initially distributed in Canada – each of the six identified Canadian bondholders is an accredited investors – issuer will offer identical consideration for the repurchase by the issuer of each Eurobond held and all bondholders will be entitled to participate in the Offer on equal terms – in order to participate in the offer each Canadian bondholder must provide a confirmation and consent in which it will, among other things, acknowledge that as a result of the relief being granted, the holder will not have the benefit of the protections provided by the Issuer Bid Requirements or the requirements relating to issuer bids provided by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

Applicable Legislative Provisions

National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.

September 12, 2018

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(The Jurisdiction)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
JUST ENERGY GROUP INC.
(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction (the Decision Maker) has received an application (the Application) from the Filer for a decision under the securities legislation of the principal regulator (the Legislation), pursuant to section 6.1 of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104), for relief from the issuer bid requirements set out in Part 2 of NI 62-104 (the Issuer Bid Requirements) in connection with an offer (the Offer) to be made by the Filer to repurchase the USD$150 million principal amount of 6.5% senior convertible bonds of the Filer due July 2019 (the Eurobonds) from the holders (the Bondholders) of the Eurobonds (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(a) the Ontario Securities Commission is the principal regulator for the Application; and

(b) the Filer has provided notice that section 4.7(1)(c) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Nunavut and the Yukon Territory.

Interpretation

Terms defined in National Instrument 14-101 Definitions or MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation incorporated under the Canada Business Corporations Act. The head office of the Filer is located in Mississauga, Ontario.

2. The Filer is a reporting issuer in all of the provinces and territories of Canada and is not in default of securities legislation in any jurisdiction.

3. On January 29, 2014, the Filer entered into a Trust Deed with U.S. Bank Trustees Limited, as trustee (USBTL), and Elavon Financial Services Limited, UK Branch, as share trustee-custodian, which provided for the issuance of US$150 million principal amount of Eurobonds (the Trust Deed).

4. The Eurobonds are listed on the Professional Securities Market of the London Stock Exchange (PSM) under the trading symbol “48IL”. To the Filer’s knowledge, there has never been a trade of the Eurobonds through the facilities of the PSM.

5. The Eurobonds bear interest at an annual rate of 6.5%, payable semi-annually in arrears in equal installments on January 29 and July 29 each year with a maturity date of July 29, 2019.

6. The Eurobonds are convertible into common shares of the Filer at any time from May 30, 2014 to July 7, 2019, at the option of the Bondholder. The current conversion rate is equal to US$9.3762 per common share, with a conversion floor price of US$7.6540 per common share, subject to customary anti-dilution adjustments (the Conversion Right).

7. The Filer’s common shares are listed on the TSX and the NYSE under the trading symbol “JE”.

8. As at August 31, 2018, there were 149,251,230 common shares of the Filer outstanding and the closing price per common share on the TSX was $3.90 per common share and the closing market price on the NYSE was USD$2.99.

9. In the event of an exercise of a Conversion Right, the Filer may, at its discretion, subject to applicable regulatory approval and provided that no event of default has occurred and is continuing, elect to satisfy its obligation to issue common shares by paying cash in an amount equal to the market value of the underlying common shares that would otherwise be received by the Bondholder upon such conversion.

10. The Filer does not have a general right to call the Eurobonds for redemption under the Trust Deed. However, the Filer is provided with the right to repurchase the Eurobonds in the market or otherwise under the terms of the Trust Deed.

11. The Offer will be made in compliance with applicable securities laws of the United Kingdom.

12. Pursuant to the terms of the Offer, the Filer intends to offer to all Bondholders, including those located in Canada and those located outside of Canada, identical consideration for the repurchase by the Filer of each Eurobond held and all Bondholders will be entitled to participate in the Offer on equal terms.

13. The Eurobonds were initially placed solely in Europe and elsewhere outside of Canada in the form of a global bond, which was and remains registered in Europe solely in the name of USB Nominees (UK) Limited, which is a nominee of USBTL. To the knowledge of the Company, no person that was located in Canada purchased Eurobonds pursuant to the initial placement thereof by the Filer.

14. Given that there has not been a trade of the Eurobonds through the PSM, in order to form a reasonable belief with regard to the beneficial ownership of the Eurobonds owned by Canadians, the Filer sought to determine whether there had been any institutional trades among investment dealers in the Eurobonds.

15. With the assistance of a Canadian investment dealer and based on information obtained via Bloomberg, the Filer was able to ascertain that, as a result of trades through the over-the-counter market, six (6) Canadian institutional investors (collectively, the Accredited Investor Bondholders) held an aggregate of approximately US$38.7 million principal amount of Eurobonds, representing approximately 26% of the outstanding Eurobonds as at September 7, 2018.

16. Each of the Accredited Investor Bondholders is located in Canada (Ontario and British Columbia) and to the knowledge of the Filer each is an “accredited investor” as defined under the Legislation. The Filer believes that each of the Accredited Investor Bondholders is knowledgeable of the affairs of the Filer, considers itself able to evaluate the Offer without the assistance of an issuer bid circular or a valuation of the Eurobonds, and that it is a sophisticated investor with significant knowledge of the Canadian securities markets and eurobond market.

17. As the Offer will be made to Canadian Bondholders, the Offer will constitute an issuer bid under the Legislation and will be subject to the Issuer Bid Requirements, unless an exemption from the Issuer Bid Requirements is available.

18. The “foreign issuer bid exemption” set out in section 4.10 of NI 62-104 would be available, but for fact that the Canadian Bondholders beneficially own more than 10% of the Eurobonds. No other exemptions from the Issuer Bid Requirements would be available to the Filer.

19. The material relating to the Offer will be prepared in English. The material relating to the Offer that is sent by or on behalf of the Filer to Bondholders will be filed and sent or otherwise provided to each Canadian Bondholder.

20. The Filer will provide a copy of this Decision to each Canadian Bondholder at the same time as it provides the material relating to the Offer.

21. The Filer will provide each Canadian Bondholder with a Canadian Eurobond Holder Confirmation and Consent (the Confirmation and Consent) in the form of the Confirmation and Consent in Appendix A to this Decision, pursuant to which the respective Canadian Bondholder will, among other things, acknowledge that as a result of the Exemption Sought being granted, the holder will not have the benefit of the protections provided by the Issuer Bid Requirements or the requirements relating to issuer bids provided by Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

22. In the news release to be issued by the Filer announcing the Offer, the Filer will include a statement that the Filer has received the Exemption Sought, and that participation of a Canadian Bondholder in the Offer will be subject to receipt by the Filer of an executed Confirmation and Consent by such Canadian Bondholder.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that prior to or concurrent with the Filer allowing any Bondholder located in Canada to participate in the Offer, the Filer has received an executed Confirmation and Consent from such Bondholder.

“Naizam Kanji”
Director, Office of Mergers & Acquisitions
Ontario Securities Commission

APPENDIX A

CANANDIAN EUROBOND HOLDER CONFIRMATION AND CONSENT

TO: Just Energy Group Inc. (the “Company”)

AND TO: Ontario Securities Commission (“OSC”)

AND TO: Lucid Issuer Services Limited, as tender agent

RE: Application by the Company to the OSC, as principal regulator, for exemptive relief in connection with an offer (the “Offer”) made by the Company to repurchase its US $150 million principal amount of 6.5% senior unsecured convertible bonds maturing July 29, 2019 (the “Eurobonds”)

The undersigned beneficial holder of Eurobonds (the “Holder”) hereby acknowledges, confirms and agrees as follows:

1. it has been advised that the Offer has been made to all holders of Eurobonds (“Bondholders”), including the Holder, on the same terms and conditions and for identical consideration;

2. it has been advised that all materials related to the Offer that have been sent to Bondholders located outside of Canada have been concurrently sent to the Bondholders who, to the Company’s best knowledge, had their last address shown on the books of the Company as being located in Canada;

3. it has been advised that all materials related to the Offer that have been sent to Bondholders have been prepared in English and if a Bondholder was resident in Québec, the materials have been prepared in French;

4. it has been advised that as the Offer has been made to Canadian Bondholders, it constitutes an issuer bid as defined in National Instrument 62-104 Take-Over Bids and Issuer Bids (“NI 62-104”) and is subject to the requirements of Part 2 of NI 62-104 (the “Issuer Bid Requirements”), unless an exemption from the Issuer Bid Requirements is available;

5. it has been advised that as the Offer has been made to Canadian Bondholders, it also constitutes an issuer bid as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and would be subject to the requirements of Part 3 of MI 61-101 (the “MI 61-101 Requirements”);

6. it has been advised that as the Offer has been made to Canadian Bondholders, the Company is unable to rely on the foreign issuer bid exemption in section 4.10 of NI 62-104 as, to the knowledge of the Company, six Canadian institutional investors, including the Holder, hold approximately US$38.7 million principal amount of the Eurobonds, representing approximately 26% of the outstanding Eurobonds;

7. it has been advised that as no other exemptions from the Issuer Bid Requirements are available to the Company, the Company applied to the OSC, as principal regulator, for relief from the Issuer Bid Requirements and MI 61-101 Requirements (the “Requested Relief”) in connection with the Offer;

8. it has been advised that the OSC granted the Requested Relief;

9. it hereby consents to the use of this Canadian Eurobond Holder Confirmation and Consent by the Company in connection with the Requested Relief;

10. it is an accredited investor as defined in section 73.3 of the Securities Act (Ontario);

11. it beneficially owns the principal amount of Eurobonds indicated below;

12. it hereby acknowledges that as a result of the Requested Relief being granted, the Holder does not have the benefit of the protections provided by: (i) the Issuer Bid Requirements; and (ii) the protections relating to issuer bids provided by the MI 61-101 Requirements, which among other things, require the Company to obtain a formal valuation for the Eurobonds and provide disclosure relating thereto;

13. it hereby acknowledges that it has received a copy of the decision document issued by the OSC granting the Requested Relief;

14. any person or company affected by a decision of the Director (as defined in the Securities Act (Ontario)), may, by notice in writing sent by registered mail to the OSC within thirty days after the mailing of the notice of the decision, request and be entitled to a hearing and review thereof by the OSC; and

15. it has had adequate time to review this Canadian Eurobond Holder Confirmation and Consent.

DATED at _________, the ______day of __________, 2018.

_____________________________________________________
Name of beneficial Bondholder (please print)

by: ________________________
Authorized Signature
________________________
Official Capacity or Title
(please print)

_____________________________________________________
Please print name of individual whose signature appears above
if different than the name of the Bondholder printed above

_____________________________________________________
Principal amount of Eurobonds of the Company beneficially owned

_____________________________________________________
Province/Territory where beneficial Bondholder is present