Kereco Energy plans tender offer for 4.75% convertibles

By Angela McDaniels

Tacoma, Wash., Jan. 15 - Kereco Energy Ltd. plans to make an offer to repurchase its C$70 million 4.75% convertible unsecured subordinated debentures due 2012 at 95% of par, according to a company news release.

"Although these 4.75% debentures are an attractive form of financing, we believe that having excess cash on the balance sheet together with an undrawn bank line is not an efficient capital structure for Kereco going forward," the release stated.

Subject to regulatory and Toronto Stock Exchange approvals, the company said it anticipates mailing an offer to convertible holders before the end of January.

Also on Tuesday, Kereco announced the completion of its disposition of non-strategic assets for C$245 million of net cash, which leaves the company with an undrawn C$100 million bank facility, no bank debt and cash on hand of about C$80 million.

Kereco is a natural gas exploration company based in Calgary, Alta.

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