Company also announces plans to buy back nearly all 10% convertibles
By Devika Patel
Knoxville, Tenn., Jan. 25 - Leader Energy Services Ltd. said it negotiated a term sheet with a new investor for a C$15 million three-year 12% secured debt facility.
At settlement, the investor also will receive 4 million three-year warrants. Each warrant will be exercisable at a 15% premium to the five-day volume-weighted average share price on the settlement date, which is expected to be Feb. 15.
The company also said it agreed to repurchase C$12.56 million, or 95.4%, of its C$13.16 million of remaining 10% convertible subordinated debentures due March 31, 2012. The company will pay for the convertibles plus C$1.4 million of deferred interest at 110% of face value, along with C$630,000 of accrued interest, for a total of C$16 million.
The company issued C$15 million of the convertibles on Feb. 28, 2007. They are convertible at C$0.40 per share. As of Jan. 24, C$1.84 million has been converted.
In addition to the proceeds from the new facility, Leader will use its existing working capital to refinance the convertibles.
"These are two significant developments for our company," president Rod Hauser said in a press release. "In addition to extending the term of our debt facility by two years, we will be able to eliminate the likelihood of significant dilution in the number of shares outstanding had our debentures remained in place. More than 31 million shares could have been issued at a conversion price of [C]$0.40 had these remaining debentures been converted."
Based in Calgary, Alta., Leader is a provider of well stimulation and cementing services.
| Issuer: | Leader Energy Services Ltd.
|
| Issue: | Secured debt facility
|
| Amount: | C$15 million
|
| Tenor: | Three years
|
| Coupon: | 12%
|
| Warrants: | 4 million
|
| Warrant expiration: | Three years
|
| Warrant strike price: | 15% premium to five-day VWAP on Feb. 15
|
| Pricing date: | Jan. 25
|
| Settlement date: | Feb. 15
|
| Stock symbol: | TSX Venture: LEA
|
| Stock price: | C$0.67 at close Jan. 25
|
| Market capitalization: | C$8.89 million
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