After multiple breaches of its senior credit agreements with affiliates of LiUNA Pension Fund of Central and Eastern Canada, it appears that Entourage Health (TSXV: ENTG) has finally found a resolution for the matter – the company is going private.

The go-private transaction will see Entourage Health acquired by 1001007762 Ontario Inc., in a transaction guaranteed by 2437653 Ontario Inc. Unsurprisingly, both parties are related parties to that of the LiUNA Pension Fund.

And in a slight win for shareholders, despite the financial condition of Entourage, LiUNA has agreed to pay $0.005 per common share to shareholders under the terms of the definitive agreement, while holders of the convertible debt are to be paid out under the same terms. A total of $250,000 is to be paid out to unsecured debenture holders under the terms of a settlement agreement.

A review conducted by a special committee of independent directors has determined the transaction to be fair, while the board of directors has approved of the transaction and recommended that shareholders approve of the go-private deal.

Entourage Health currently has $167.6 million of indebtedness under its senior credit and subordinated credit agreements that are currently in place with the guarantor of the transaction. Breaches under those credit agreements are waived until January 15, and the company does not expect to be able to meet obligations under those agreements should the waivers no longer be obtainable.

The guarantor meanwhile has agreed to provide forbearance on the outstanding debt until the earlier of the termination of the transaction, the completion of the transaction, and the outside date outlined within the arrangement agreement. In other words, LiUNA has provided a lifeline to shareholders with this transaction, and should the transaction not be approved, it is likely they would secure the assets through defaults on the debt.

The transaction remains subject to shareholder approval, with the company requiring 66.7% of shareholders to approve of the terms of the deal. A shareholder meeting is currently set to occur in February 2025 to approve of the transaction, with the go-private deal to close shortly thereafter should approve be provided.

Entourage Health last traded at $0.005 on the TSX Venture.

Information for this story was found via Sedar, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.