Welton to forgo Dec. 31 interest on 8% convertibles, extend due date

By Susanna Moon

Chicago, Dec. 19 - Welton Energy Corp. said it will hold a meeting at 12 p.m. ET on Jan. 14 for holders of its 8% convertible secured subordinated debentures due Jan. 15, 2009.

Holders will consider an extraordinary resolution to waive Welton's obligation to pay interest on Dec. 31 and amend the notes to extend the maturity from Jan. 15 to the earlier of March 31 and a date specified by holders of 25% of the principal amount of notes. The resolution is expected to be mailed to holders by Dec. 22.

The proposed amendment will facilitate completion of an arrangement with Churchill Energy Inc. and provide more flexibility, according to a press release. The amendment requires Toronto Stock Exchange approval.

On Dec. 16, Welton and Churchill said they had agreed for Churchill to acquire Welton by plan of arrangement, which is expected to be completed in February.

Welton said the arrangement is the culmination of the process that began in March 2008 to explore strategic alternatives to address its inability to repay the principal amount of the convertibles from budgeted cash flows.

Accordingly, Welton said it does not intend to pay interest on the convertibles on Dec. 31 and that the convertibles will begin trading flat on Dec. 22.

Welton Energy, an oil and gas exploration and development company based in Calgary, Alta.

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