Company chairman/CEO subscribes for C$4 million to C$7.8 million
By Susanna Moon
Chicago, May 13 - Diaz Resources Ltd. said it plans to sell C$8 million principal amount of 10.5% secured subordinated convertible debentures due March 31, 2016 by way of private placement.
The notes are non-callable for one year. After that, the notes are callable if the 20-trading day volume-weighted average price of the company's shares ending five trading days before the date of the redemption notice is at or above 120% of the conversion price. They will be callable at 105 between June 30, 2012 and June 30, 2015 and then at 102.5 after June 30, 2015.
The conversion price is C$0.075.
Proceeds will be used to reduce the company's bank debt, to repay a bridge financing loan from Humboldt Capital Corp. and for general corporate purposes, including the continued development of the company's oil reserves, according to the company's press release.
R. W. Lamond, the chairman, president and chief executive officer of Diaz, as well as the chairman, president and CEO of Humboldt, agreed to subscribe for a minimum of C$4 million. Lamond also will purchase any remaining notes not purchased by third parties, for a maximum of C$7.8 million principal amount of notes.
In exchange, Diaz has agreed to repay the Humboldt C$1 million bridge financing loan with proceeds of the offering and to use commercially reasonable efforts to place the C$4 million balance of the issue to third parties.
The offer is expected to settle on June 10.
Diaz said it is applying to the Toronto Stock Exchange for an exemption from the requirement for shareholder approval.
Diaz is an oil and gas exploration and production company based in Calgary, Alta.
| Issuer: | Diaz Resources Ltd.
|
| Issue: | Secured subordinated convertible debentures
|
| Amount: | C$8 million
|
| Maturity: | March 31, 2016
|
| Coupon: | 10.5%
|
| Price: | Par
|
| Yield: | 10.5%
|
| Conversion price: | C$0.075
|
| Warrants: | No
|
| Investor: | R. W. Lamond (for C$4 million to C$7.8 million)
|
| Pricing date: | May 13
|
| Stock symbol: | Toronto: DZR
|
| Stock price: | C$0.09 at close May 12
|
| Market capitalization: | C$7.72 million
|
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