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Pengrowth plans to make offer for NAL convertibles post-combination
By Jennifer Chiou
New York, March 23 - Pengrowth Energy Corp. entered into an agreement under which NAL Energy Corp. shareholders will receive 0.86 of a Pengrowth share for each NAL share held, according to a news release.
With this strategic combination, Pengrowth will also assume all of the rights and obligations under NAL's 6.75% convertible unsecured subordinated debentures due Aug. 31, 2012, 6.25% convertible unsecured subordinated debentures due Dec. 31, 2014 and 6.25% convertible unsecured subordinated debentures due March 31, 2017. Pengrowth also intends to make purchase offers for the securities after the combination is completed.
With the agreement, the conversion price for each series of debentures will be adjusted based on the exchange ratio in the transaction. Using the March 22 closing prices of the companies' stocks on the Toronto Stock Exchange, the exchange ratio for the arrangement reflects a premium of 9.7% for NAL shareholders, the release said.
Pengrowth intends to make the necessary offers for the 6.75% debentures and 6.25% debentures due 2014 at 101% of par plus accrued interest. It will offer par plus accrued interest for the 6.25% debentures due 2017.
The release said that the proposed transaction will be carried out by way of a court approved plan of arrangement and will require the approval of the holders of at least 66 2/3% of NAL shares.
Upon completion of the combination, former NAL shareholders will own about 26% of Pengrowth.
Pengrowth is a Calgary, Alta.-based producer of oil and natural gas. NAL pursues a strategy of acquiring, producing and selling crude oil, natural gas and natural gas liquids from assets based in southeastern Saskatchewan, central Alberta and northeastern British Columbia.
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