Red Mountain Resources plans best efforts sale of 10% preferred units

Global Hunter is bookrunner; units include warrants for 25 shares

By Stephanie N. Rotondo

Phoenix, June 24 - Red Mountain Resources Inc. will price an offering of units consisting of one 10% series A cumulative redeemable preferred share and one warrant equal to 25 common shares, the company said in a prospectus filed with the Securities and Exchange Commission on Monday.

The offering is being done on a best efforts basis.

Global Hunter Securities is the bookrunning manager. Wunderlich Securities Inc. is the lead managing underwriter. Also participating in the syndicate are C.K. Cooper & Co., National Securities Corp. and Northland Capital Markets.

Dividends on the preferreds will be payable on the 15th day of January, April, July and October. The securities become redeemable in 2014 at a percentage of par - 110% in 2014, 107% in 2015, 103% in 2016 and 100% in 2017 - plus accrued dividends and will be mandatorily redeemed in 2018.

The company is required to redeem the shares within 120 days of a change of control.

The dividend rate may increase in the event of a dividend default, a listing default or a financial covenant default.

Proceeds will be used with cash on hand and borrowings available under a credit facility to pay down outstanding debt and to fund drilling and development expenditures.

Red Mountain is a Dallas-based oil and gas company.

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