NR - Artisan arranges $15-million to $25-million financing Good luck AEC.
2014-02-24 15:19 MT - News Release
Mr. Rick Ironside reports
ARTISAN ENERGY ANNOUNCES BROKERED SHORT-FORM PROSPECTUS FINANCING AND CORPORATE UPDATE
Artisan Energy Corp. has provided the following update on its corporate activities.
Brokered financing
Artisan is pleased to announce that it has obtained a receipt for a preliminary short-form prospectus in connection with a public offering, on a commercially reasonable efforts basis, of common shares in the capital of the corporation and common shares issued on a flow-through basis, through Clarus Securities Inc. The pricing of the common shares and the flow-through shares will be determined in the context of the market, for minimum aggregate gross proceeds of $15-million and maximum aggregate gross proceeds of $25-million.
The agent will be paid a cash commission equal to 6.5 per cent of the gross proceeds of the offering. Clarus will also receive warrants to purchase such number of common shares equal to 6.5 per cent of the offered shares sold under the offering. The agent's warrants will be exercisable for a period of 24 months following closing of the offering at a purchase price per share equal to the common share issue price.
It is currently anticipated that the net proceeds from the offering will be used to finance the acquisition of the previously announced Provost asset, for the repayment of the loan facility (defined herein), for the development of the corporation's developmental light oil and liquids-rich natural gas projects, and for general corporate purposes. Proceeds from the issuance of flow-through shares under the offering, if any, will be used by the corporation to incur Canadian development expenses and Canadian exploration expenses, as applicable.
Artisan has obtained a receipt for the preliminary prospectus filed with the securities regulatory authorities in each of the provinces of Alberta, British Columbia and Ontario. Artisan has made application to have the offered shares listed for trading on the TSX Venture Exchange. The closing of the offering is subject to certain closing conditions, including, but not limited to, the issuance of a receipt by the securities regulatory authorities in each of the provinces of Alberta, British Columbia and Ontario for a final short-form prospectus qualifying the distribution of the offered shares, the approval of the TSX Venture Exchange, and execution of an agency agreement between the corporation and the agent.
Extension of current loan facility
The corporation has a loan facility, which is currently drawn to $3.9-million, from Tallinn Capital Corp., and which was to have matured on Oct. 31, 2013. The corporation has entered into a commitment letter with the lender to amend the loan facility. The key provisions of the amendments include, but are not limited to, an extension of the maturity date from Oct. 31, 2013, to April 30, 2014. Additional details relating to the amendment of the loan facility are available in the preliminary short-form prospectus on SEDAR.
New revolving credit facility
The corporation has executed a non-binding, indicative term sheet dated Feb. 13, 2014, with ATB Financial, which contemplates the grant to the corporation of a secured, demand, revolving credit facility in the amount of $5-million. The ATB credit facility would be secured by, among other things, a general security agreement providing a first floating charge over all present and after-acquired real and personal property of the corporation and an undertaking to grant, at the request of ATB, a first fixed charge against all property interests of the corporation. Interest payable on the ATB credit facility would be the prime rate of interest plus 1.75 per cent per annum. The ATB term sheet provides that the ATB credit facility is being granted to finance development of Artisan's developmental light oil projects. The formal granting of the ATB credit facility remains subject to ATB's satisfactory completion of due diligence and internal credit approval and closing of the acquisition of the Provost asset and the offering. Obtaining the ATB credit facility is a condition to completion of the offering. For additional details, see the preliminary short-form prospectus on SEDAR.
We seek Safe Harbor.