CGX-FRONTERA - LETTER AGREEMENTThe actual letter agreement between CGX and Frontera is available on SEDAR - would recommend for CGX shareholders to review its content.
Note, the 'letter agreement' appears to set out the general working parameters around the future (final) agreement between both companies - which is expected to be finalized on or before February 6, 2019.
The coversion price for the US $20M rights offering and the approximate US $8.9M bridge loan facility (if converted into common shares) is expected to be derived from CGX's stock price at the time of executing the final agreement (expected to be on or before February 9, 2019).
So, in my humble opinion, leaves room for CGX stock price to potentially increase based on some near term catayst (JV, Haimara well results, etc).
US $20M Financing:
- the subscription price for rights shall be the lower of 90% of the Market Price for common shares as of the data hereof or as of the date the right offering notice is filed on SEDAR.
AMENDED BRIDGE LOAN AGREEMENT:
- As of December 4th - US $8.9 million is outstanding.
- At any time, and from time to time, after the effective date of the Amended Bridge Loan Agreement, up to and including the close of business on the Maturity Date (Sept 30, 2019), Frontera may elect to convert all or a portion of the principal amount then outstanding under the Amended Bridge Loan Agreement (the “Conversion Right”) into common shares in the capital of CGX Energy (the “Common Shares”), with the minimum conversion amount being equal to US$1,000 at the conversion price per Common Share equal to the closing price of the Common Shares on the day prior to the announcement of the Amended Bridge Loan Agreement, or any higher amount as required by the TSX Venture Exchange approval (the “Conversion Price”).