By Rebecca Melvin
New York, June 28 - Canacol Energy Ltd. priced C$41.5 million five-year convertible unsecured debentures on a bought-deal basis at par to yield 8% with an initial conversion premium of 28%, according to a news release.
The deal was sold under a short form prospectus via a syndicate of underwriters led by Canaccord Genuity Corp. and including FirstEnergy Capital Corp., Cormark Securities Inc., Citigroup Global Markets Canada Inc., and Mackie Research Capital Corp.
Each debenture is convertible at a conversion price of C$1.0526 per common share, which is a ratio of 950 common shares per C$1,000 principal amount of debentures.
Of the proceeds, US$9.6 million will be used to repay its credit facility with Standard Bank and US$18 million will be used to terminate investment agreements on its Rancho Hermoso, Entrerrios and Capella oil fields in Colombia from Gemini Oil and Gas Fund II, LP.
Remaining net proceeds will be used to fund continued field development and exploration operations.
In connection with the termination of the Gemini investment agreements, the company will issue US$3.5 million in common shares to Gemini, which at the closing price of C$0.82 per common share on Friday equaled a total of 4,421,260 common shares.
Upon closing the bought deal, the company will have about US$80 million in cash and equivalents with which to fund development and exploration programs through 2011.
The offering is subject to normal regulatory approvals, including the approval of the TSX Venture Exchange.
Based in Calgary, Alta., Canacol Energy is an independent onshore oil exploration company.
| Issuer: | Canacol Energy Ltd.
|
| Issue: | Convertible unsecured debentures
|
| Amount: | C$41.5 million
|
| Maturity: | June 30, 2015
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Conversion premium: | 28%
|
| Conversion price: | C$1.0526
|
| Underwriters: | Canaccord Genuity (lead), FirstEnergy Capital Corp., Cormark Securities Inc., Citigroup Global Markets Canada Inc., Mackie Research Capital Corp.
|
| Stock symbol: | TSX Venture: CNE
|
| Stock price: | C$0.82 at close June 25
|
| Market capitalization: | C$412.3 million
|
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