CALGARY, ALBERTA--(Marketwire - March 22, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Celtic Exploration Ltd. (TSX:CLT)("Celtic" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of underwriters (the "Underwriters"), co-led by RBC Capital Markets and Peters & Co. Limited, pursuant to which the Underwriters will purchase C$125.0 million principal amount of convertible subordinated unsecured debentures (the "Debentures") at a price of C$1,000 per Debenture (the "Offering"). The Company has also granted the Underwriters an over-allotment option to purchase up to an additional C$18.75 million aggregate principal amount of Debentures on the same terms and conditions, exercisable in whole or in part at any time for a period of 30 days following closing of the Offering. The Company will use the net proceeds to repay outstanding indebtedness and for general corporate and working capital purposes.
The Debentures will mature and be repayable on April 30, 2017 (the "Maturity Date") and will accrue interest at the rate of 5.0% per annum payable semi-annually in arrears on April 30th and October 31st of each year (the "Interest Payment Date"), commencing on October 31, 2012. At the holder's option, the Debentures may be converted into common shares of the Company at any time prior to the close of business on the earlier of the business day immediately preceding (i) the Maturity Date, (ii) the date fixed for redemption by the Company, or (iii) if called for repurchase in the event of a change of control, the payment date, at a conversion price of C$21.90 per share. This represents a conversion rate of approximately 45.6621 common shares for each C$1,000 principal amount of Debentures, subject to certain anti-dilution provisions. Holders who convert their Debentures will receive accrued and unpaid interest for the period from the date of the latest Interest Payment Date to the date of conversion.
The Debentures will be direct, subordinated unsecured obligations of the Company, subordinated to any senior indebtedness of the Company and ranking equally with one another and with all other existing and future subordinated unsecured indebtedness of the Company.
The Debentures may not be redeemed by the Corporation prior to April 30, 2015. On and after May 1, 2015 and prior to maturity, the Debentures may be redeemed by the Corporation, in whole or in part from time to time, on not more than 60 days and not less than 40 days prior notice at a redemption price equal to their principal amount plus accrued and unpaid interest, if any, up to but excluding the date set for redemption, provided that the weighted average trading price of the Common Shares on the TSX, converted at the daily Bank of Canada noon rate of exchange, for the 20 consecutive trading days ending five trading days prior to the date on which notice of redemption is provided is at least 125% of the Conversion Price.
The Debentures will be offered in all provinces of Canada by way of short form prospectus. The Offering is scheduled to close on or about April, 12, 2012 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.
The Debentures offered have not and will not be registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.
Advisory Regarding Forward-Looking Statements
The information with respect to Celtic contained herein, contains forward-looking statements, including statements concerning the anticipated closing date, the anticipated use of proceeds of the offering and planned drilling operations. These forward-looking statements are based on assumptions, including the anticipated receipt of regulatory approvals and are subject to numerous risks and uncertainties, certain of which are beyond Celtic's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency exchange rate fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers, stock market volatility and ability to access sufficient capital. As a result, Celtic's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur. In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. Celtic does not intend, and does not assume any obligation, to update or revise these forward-looking statements except as required pursuant to applicable securities laws.