By Sheri Kasprzak
New York, Jan. 23 - CanArgo Energy Corp. said it received an agreement for a $13 million private placement of subordinated convertible guaranteed loan notes.
A group of accredited investors agreed to buy the notes, which are due on Sept. 1, 2009.
The notes initially bear interest at 3% annually. After Dec. 31, 2006, interest accrues at 10% annually.
The notes are convertible into shares at $1.37 each.
The deal is slated to close in mid-February.
The notes are callable initially at 105% of face value plus interest, declining by 1% every six months.
The investors will have the right, for one year, to convert the notes into 25% equity interest in Tethys Petroleum Investments Ltd.
The investors will receive warrants for 13 million shares, exercisable for two years at $1.37 each.
Proceeds will be used for the development of the Kyzyloi gas field in Kazakhstan and on commitments on exploration programs through Tethys Petroleum.
Based in New York, CanArgo is an oil and natural gas exploration company.
Issuer: | CanArgo Energy Corp.
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Issue: | Subordinated convertible guaranteed loan notes
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Amount: | $13 million
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Maturity: | Sept. 1, 2009
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Coupon: | 3%, initially (10% after Dec. 31, 2006)
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Price: | Par
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Yield: | 3%, initially (10% after Dec. 31, 2006)
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Conversion price: | $1.37
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Call: | At 105% of face value plus interest, declining by 1% every six months
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Warrants: | For 13 million shares
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Warrant expiration: | Two years
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Warrant strike price: | $1.37
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Announcement date: | Jan. 23
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Stock symbol: | AMEX: CNR
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Stock price: | $1.41 at close Jan. 23
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