By Sheri Kasprzak
Atlanta, June 9 - CanArgo Energy Corp. said it has received an agreement for the private placement of $25 million in secured loan notes.
The notes bear interest at 3% annually through Dec. 31, 2005; 10% annually throughout 2006 and 15% thereafter. The notes mature on June 30, 2009 and are convertible, in part, into common shares at $0.90 each.
The notes will be placed by the end of the month with current shareholder Ingalls & Snyder LLC.
The proceeds will be used to redeem a short-term loan note from Cornell Capital Partners LP. The remainder will be used to fund the development of a new gas project in the country of Georgia, to fund the development of a gas field in Kazakhstan and to provide working capital for development and appraisal activities in Georgia.
In other news, CanArgo said it plans to acquire Tethys Petroleum Investments Ltd.
Based in New York, CanArgo is an oil and natural gas exploration and production company.
| Issuer: | CanArgo Energy Corp.
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| Issue: | Secured loan notes
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| Amount: | $25 million
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| Maturity: | June 30, 2009
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| Coupon: | 3% through Dec. 31, 2005; 10% throughout 2006; 15% thereafter
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| Conversion price: | $0.90
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| Warrants: | No
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| Investor: | Ingalls & Snyder LLC
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| Announcement date: | June 9
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| Settlement date: | June 30
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| Stock price: | $0.82 at close June 9
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