Transmeridian offers cash, new notes for 12% notes

New York, July 23 - Transmeridian Exploration Inc. began an exchange offer for its $290 million principal amount of 12% senior secured notes due 2010.

The Houston-based energy company is offering $101 in cash and $900 of new 12% senior secured notes due 2010 for each $1,000 principal amount of existing notes. The cash amount includes a $30 consent payment.

The new notes will be identical to the existing notes but will not include the right to have the securities repurchased upon the closing of the transactions between Transmeridian and United Energy Group Ltd.

In conjunction with the exchange, Transmeridian is soliciting consents to amend the note indenture.

Holders who deliver consents by the deadline of 5 p.m. ET on Aug. 7 will receive the $30 per $1,000 consent payment. Notes cannot be tendered without delivering consents.

The exchange ends at midnight ET on Aug. 21.

Conditions to the exchange include the receipt of tenders for at least 90% of the notes, excluding any held by United Energy, giving a required response of at least $222.2 million, and successful completion of a tender offer to be conducted by United Energy for Transmeridian's senior preferred stock and junior preferred stock.

Consents are needed from holders of a majority of the notes, excluding any held by United Energy.

Successful completion of the exchange and consent solicitation is a condition to the completion of the transactions between Transmeridian and United Energy.

Only qualified institutional buyers under Rule 144A, institutional accredited investors under Regulation D, or non-U.S. persons may participate.

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