Cygnus Oil gets redemption request for convertibles, files bankruptcy

By Sheri Kasprzak

New York, April 5 - Cygnus Oil and Gas Corp. will be required to redeem convertible notes issued in an April 2006 private placement after the company allegedly defaulted on the securities.

Also on Thursday, Cygnus announced that it has filed for bankruptcy in U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

SF Capital Partners notified the company that it will be requiring Cygnus to redeem the notes for $5 million, or 125% of the principal amount held by SF. The total redemption price would be $27.5 million.

The company must also pay $199,000 in unpaid interest.

Cygnus allegedly defaulted on the 7.5% notes, which are due April 4, 2009, when it failed to make a $412,500 interest payment due Dec. 31, 2006.

Houston-based Cygnus is an oil and natural gas exploration and development company.

On Thursday, the company's stock gave up 0.4 cents to close at $0.013 (OTCBB: CYNS).

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