United Hydrocarbon wraps restructuring; Dundee debentures converted

By Wendy Van Sickle

Columbus, Ohio, Aug. 31 – United Hydrocarbon International Corp. (UHIC) and Dundee Corp. have completed a restructuring of UHIC’s capital structure under which the company has emerged with a clean balance sheet, according to a press release.

As part of the restructuring, Dundee, through some of its subsidiaries, converted about $323 million of outstanding secured convertible debentures and promissory notes of UHIC issued prior to June 1 into common shares of UHIC and forgave all of the accrued interest on those debentures and notes.

Dundee now holds about 85.1%, up from 33%, of the outstanding common shares of UHIC and has agreed to the cancellation of all outstanding convertible securities held by it and by its subsidiaries. Dundee believes the renewed capital structure will make investing in UHIC more attractive for third-parties, according to the release.

The restructuring also provides UHIC with sufficient working capital to pursue its immediate objective of attracting a joint venture partner or investors to fund further development of its resources.

“We continue to support UHIC management in their efforts to secure partners with additional new capital to help their strategic growth objectives,” David Goodman, president and chief executive officer of Dundee, said in the release.

In connection with the restructuring, Dundee also agreed to fully backstop a $10 million private placement of common shares by UHIC, which is being made available only to existing shareholders, provided that other shareholders of UHIC are given the opportunity to participate, to the extent possible, on the same terms. The financing is expected to close in September.

UHIC retained FirstEnergy Capital Corp. as its independent financial adviser to assist in identifying alternative sources of financing or a joint venture partner.

Based in Calgary, Alta., UHIC is an oil and gas company with 100% working interest in four blocks in Chad, Africa. Dundee is a Toronto-based independent holding company. Through its operating subsidiaries, the company is engaged in business activities in the areas of investment advisory, corporate finance, energy, resources, agriculture, real estate and infrastructure.

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