12.

SHAREHOLDERS' CAPITAL

Just Energy is authorized to issue an unlimited number of common shares and

50,000,000

preference shares issuable in series, both with

par value. Shares outstanding have

preferences, rights or restrictions attached to them.

(a)

Details of issued and outstanding shareholders' capital are as follows:

	Six months ended						Year ended
	Sept. 30, 2020						March 31, 2020
	Shares			Amount			Shares		Amount
Common shares:

Issued and outstanding
Balance, beginning of period		4,594,371		$	1,099,864			4,533,211	$	1,088,538
Share-based awards exercised		798			176			61,160		11,326
Issuance of shares due to Recapitalization		43,392,412			438,642			-		-
Issuance cost		-			(1,572	)		-		-
Balance, end of period		47,987,581		$	1,537,110			4,594,371	$	1,099,864

Preferred shares:

Issued and outstanding
Balance, beginning of period		4,662,165		$	146,965			4,662,165	$	146,965
Exchanged to common shares		(4,662,165	)		(146,965	)		-		-
Balance, end of period		-		$	-			4,662,165	$	146,965

Shareholders' capital		47,987,581		$	1,537,110			9,256,536	$	1,246,829

The above table reflects the impacts of the Recapitalization including the extinguished convertible debentures, the settlement of the preferred shares and the issuance of new common shares. The common shares have been adjusted retrospectively to reflect the

33:1

share consolidation as part of Recapitalization (Note

12c

(b)

Dividends and distributions

In the

second

quarter of fiscal

2020,

the Company suspended its dividend on common shares. For the quarters ended

September 30, 2020

and

September 30, 2019,

respectively,

dividends per common share were declared by Just Energy. For the

six

months ended

September 30, 2020,

dividends per common share were declared by Just Energy. For the

six

months ended

September 30, 2019

one

dividend of

$0.125

per common share was declared by Just Energy resulting in a total dividend paid of

$18.7

million.

As a result of the dividend suspension, distributions related to the dividends also ceased. There were

distributions during the

three

months ended

September 30, 2020,

consistent with the same quarter in fiscal

2020.

Distributions for the

six

months ended

September 30, 2020

were

$23,

which were consistent with the same period in the prior year. These distributions related to the shares which were paid to the Board of Directors in accordance with the terms of the Canadian and U.S. Plans during the periods.

December 2, 2019,

the Board suspended the dividend on its Series A Preferred Shares. For the quarters ended

September 30, 2020

and

September 30, 2019

dividends per preferred shares were declared by Just Energy. For the

six

months ended

September 30, 2020,

dividends per preferred share were declared by Just Energy. For the

six

months ended

September 30, 2019

one

dividend of

$0.53125

per preferred share was declared by Just Energy resulting in a total dividend paid of

$3.3

million.

Under the senior secured credit facility and the

10.25%

term loan, Just Energy is

not

allowed to pay dividends to the shareholders of Just Energy.

(c)

Recapitalization transaction

September 28, 2020,

the Company completed a comprehensive plan to strengthen and de-risk the business, positioning the Company for sustainable growth as an independent industry leader (the “Recapitalization”). The Recapitalization was undertaken through a plan of arrangement under the CBCA and included:

The consolidation of the Company's common shares on a

-for-

basis;

Exchange of the

6.75%

$100M

convertible debentures and the

6.75%

$160M

convertible debentures for common shares and

$15

million principal amount of new subordinated notes (

“7.0%

$15M

subordinated notes”). The

7.0%

$15M

subordinated notes have principal amount of

$15

million, which was reduced through a tender offer for

consideration, subsequent to

September 30, 2020,

$13.1

million;

Extension of

$335

million of the Company's credit facilities to

December 2023,

with revised covenants and a schedule of commitment reductions throughout the term;

Existing

8.75%

loan and the remaining convertible bonds due

December 31, 2020

were exchanged for a new term loan due

March 2024 (

the

“10.25%

term loan”) and common shares, with interest on the new term loan to be initially paid-in-kind until certain financial measures are achieved;

Exchange of all of the

8.50%,

fixed-to-floating rate, cumulative, redeemable, perpetual preferred shares for common shares;

Accrued and unpaid interest paid in cash on the subordinated convertible debentures until

September 28, 2020;

The payment of certain expenses of the ad hoc group of convertible debenture holders;

The issuance of approximately

$3.7

million of common shares by way of an additional private placement to the Company's term loan lenders at the same subscription price available to all securityholders pursuant to the new equity subscription offering, proceeds of which partially offset the incremental cash costs to the ad hoc group noted above;

The entitlement of holders of Just Energy's existing

8.75%

loan,

6.5%

convertible bonds, the subordinated convertible debentures, preferred shares and common shares as of

July 23, 2020

to subscribe for post-consolidation common shares at a price per share of

$3.412,

with subscriptions totaling

15,174,950

common shares resulting in cash proceeds for Just Energy of approximately

$52

million;

Pursuant to the previously announced backstop commitments, the acquisition of

14,137,580

common shares by the backstop parties, on a post-consolidation basis resulting in cash proceeds for Just Energy of approximately

$48.0

million; for a total aggregate proceeds from the equity subscription option of approximately

$100.0

million, which was used to reduce debt and for general corporate purposes. In accordance with the Plan of Arrangement, the Board of Directors of Just Energy determined that the value of the equity subscription offer on

September 28, 2020

was

$4.868

per share;

The settlement of litigation related to the

2018

acquisition of Filter Group Inc. pursuant to which shareholders of the Filter Group received an aggregate of

$1.8

million in cash and

429,958

common shares; and

The implementation of a new management equity incentive plan that will permit the granting of various types of equity awards, including stock options, share appreciation rights, restricted shares and deferred shares; and

The Recapitalization did

not

result in tax expense or cash taxes since any debt forgiveness resulting from the exchange of the convertible debentures was fully reduced by operating and capital losses previously

not

used.

The Recapitalization resulted in total net gain of

$50.3

million for the

six

months ended

September 30, 2020.

The net gain reported in the consolidated statements of income (loss) is made up of the gain of

$77.0

million related to reduction in debt, partially offset by

$26.7

million of expense incurred in relation to the Recapitalization, which was

not

capitalized.