Gulf Western gets second notice of default on convertible secured notes

By Devika Patel

Knoxville, Tenn., Nov. 21 - Gulf Western Petroleum Corp. is in default on the $3.7 million in one-year convertible secured notes it sold to Metage Funds Ltd., according to an 8-K filed Friday with the Securities and Exchange Commission.

The company said in the filing that it was scheduled to pay the debentures off on the maturity date, Sept. 10, but failed to do so, constituting an event of default, increasing the coupon to 18%.

The company received a second default notice from Metage on Nov. 14, and a demand for payment in full by Nov. 25. Metage is threatening to take possession of the notes' collateral unless it is paid the principal plus $47,136.99 of accrued interest and $119,567.96 of default interest. The amount of default interest is subject to a per diem of $1,824.66 after Nov. 14.

Gulf Western is an oil and natural gas exploration and development company based in Houston.

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