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Resaca to get new credit facility with Cano Petroleum merger
By Sara Rosenberg
New York, Sept. 30 - Resaca Exploitation Inc. plans to get a new first- and second-lien credit facility in connection with its merger with Cano Petroleum Inc.
Union Bank of California, the lead bank on Cano's current credit facility, is expected to be working on the new deal, company officials said in a conference call on Wednesday.
Officials explained that both Resaca and Cano have credit facilities and those facilities need to be merged together.
Under the agreement, Cano shareholders will receive 2.1 shares of Resaca common stock for every share of Cano common stock and will own about 50% of the combined company.
The combined oil and gas company will retain the Resaca name and will have headquarters in Houston.
Closing is expected within three to five months, subject to shareholder approval by both companies, Resaca becoming listed on the NYSE Amex, the refinancing of existing bank debt and other customary conditions.
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