Cenovus Energy announces redemption of Series 7 Preferred Shares

Rhea-AI Summary

Cenovus Energy announced plans to redeem all 6 million outstanding Series 7 Preferred Shares at $25.00 per share on June 30, 2025, totaling $150 million. The redemption will be primarily funded through cash on hand. The company's Board of Directors has declared a final quarterly dividend of $0.24594 per Series 7 Preferred Share, payable on June 30, 2025, to shareholders of record as of June 13, 2025. Registered holders can contact Computershare Investor Services for inquiries, while beneficial holders should contact their financial institutions regarding redemption proceeds.

Positive

• Company has sufficient cash on hand to fund the $150 million preferred share redemption
• Demonstrates financial strength and ability to manage debt obligations

Negative

• Preferred shareholders will lose their regular dividend income stream after redemption

Insights

Financial Analyst

Cenovus's $150M preferred share redemption signals financial strength and simplifies capital structure while optimizing financing costs.

Cenovus Energy's decision to redeem all 6 million Series 7 Preferred Shares at $25.00 per share represents a $150 million capital allocation decision that will impact the company's financial structure. This redemption, funded primarily from cash on hand, suggests strong liquidity and confidence in the company's financial position.

The redemption eliminates the 3.935% dividend obligation on these preferred shares, which translates to annual savings of approximately $5.9 million in dividend payments. This move effectively reduces Cenovus's cost of capital and simplifies its capital structure by removing one class of securities from its balance sheet.

Preferred shareholders will receive their final quarterly dividend of $0.24594 per share on June 30, 2025, before the shares are redeemed at par value. The company's decision to use cash on hand rather than refinancing suggests confidence in its operating cash flow and overall financial health.

This transaction reflects a broader trend among energy companies with strong balance sheets to optimize their capital structures and return value to shareholders. By eliminating these preferred shares, Cenovus is effectively deleveraging and potentially creating more financial flexibility for future strategic initiatives, whether that's further debt reduction, common share repurchases, or increased common dividends.

CALGARY, Alberta, June 02, 2025 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (“Cenovus” or the “Company”) (TSX: CVE) (NYSE: CVE) announced today it will exercise its right to redeem the Company’s 3.935% Series 7 Preferred Shares (the “Series 7 Preferred Shares”) on June 30, 2025 (the “Redemption”). All 6 million Series 7 Preferred Shares outstanding will be redeemed at the price of $25.00 per share, for an aggregate amount payable to holders of $150 million, less required withholdings, if any, funded primarily from cash on hand.

As previously announced, the Company’s Board of Directors has declared a quarterly dividend of $0.24594 per Series 7 Preferred Share payable on June 30, 2025, to shareholders of record as of June 13, 2025. This will be the final dividend paid on the Series 7 Preferred Shares.

Inquiries from registered holders of Series 7 Preferred Shares should be directed to Cenovus’s Registrar and Transfer Agent, Computershare Investor Services Inc. at 1-866-332-8898 or (514) 982-8717 outside North America. Beneficial holders, who are not directly registered holders of Series 7 Preferred Shares, should contact the financial institution, broker, or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds.

Advisory

This news release contains certain forward-looking statements and forward-looking information (collectively referred to as “forward-looking information”), within the meaning of applicable securities legislation, about Cenovus’s current expectations, estimates and projections about the future, based on certain assumptions made in light of the Company's experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward-looking information in this news release is identified by words such as “anticipate”, “continue”, “expect”, “intend”, “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to, statements about: the completion of the Redemption, including the timing and funding thereof and the dividend payments with respect to the Series 7 Preferred Shares.

Developing forward-looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally.

Except as required by applicable securities laws, Cenovus disclaims any intention or obligation to publicly update or revise any forward‐looking information, whether as a result of new information, future events or otherwise. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward‐looking information. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. For additional information regarding Cenovus’s material risk factors, the assumptions made, and risks and uncertainties which could cause actual results to differ from the anticipated results, refer to “Risk Management and Risk Factors” and “Advisory” in Cenovus’s Management’s Discussion and Analysis for the periods ended December 31, 2024 and March 31, 2025, and to the risk factors, assumptions and uncertainties described in other documents Cenovus files from time to time with securities regulatory authorities in Canada, which are available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and Cenovus’s website at cenovus.com.

Cenovus Energy Inc.

Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans. Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company’s preferred shares are listed on the Toronto Stock Exchange. For more information, visit cenovus.com.

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Cenovus contacts

Investors		Media
Investor Relations general line		Media Relations general line
403-766-7711		403-766-7751

FAQ

What is the redemption price for Cenovus Energy's Series 7 Preferred Shares (CVE)?

Cenovus Energy will redeem the Series 7 Preferred Shares at $25.00 per share, for a total redemption value of $150 million.

When will Cenovus (CVE) redeem its Series 7 Preferred Shares?

Cenovus will redeem the Series 7 Preferred Shares on June 30, 2025.

What is the final dividend amount for Cenovus Series 7 Preferred Shares?

The final quarterly dividend is $0.24594 per Series 7 Preferred Share, payable on June 30, 2025, to shareholders of record as of June 13, 2025.

How many Series 7 Preferred Shares will Cenovus (CVE) redeem?

Cenovus will redeem all 6 million Series 7 Preferred Shares that are currently outstanding.

How will Cenovus fund the Series 7 Preferred Shares redemption?

The redemption will be funded primarily from cash on hand.