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Petro-Victory arranges $10M (U.S.) note financing
2018-08-30 16:48 ET - News Release
Mr. Richard Gonzalez reports
PETRO-VICTORY ENERGY CORP. ANNOUNCES USD $10,000,000 SENIOR SECURED DEBT FINANCING AND CORPORATE UPDATE
Petro-Victory Energy Corp. has provided the following updates.
Financing
The Company has finalized a loan agreement dated August 28, 2018 with PPF 9, LLC ("PPF") to proceed with a financing (the "Financing") of up to USD $10 million through the issuance of senior secured notes (the "Notes") with bonus warrants (the "Bonus Warrants"). The Financing will bear interest at a rate of 9% per annum payable quarterly, commencing in October, 2018, and will have a maturity date of thirty-six (36) months after the initial close.
It is anticipated that the Financing will be comprised of two or more loans. The initial loan of USD $4,000,000 is to be advanced in two tranches. The sum of USD $1,400,000 was advanced on August 29, 2018. A second tranche of USD $2,600,000 is to be advanced on a mutually agreeable date thereafter.
The Bonus Warrants associated with the Notes shall permit the holder to purchase up to 30 million shares (pro-rata at 3 warrants per dollar drawn on the loans) in the Company at a price of CDN $0.05 per share for a period of 3 years after the initial close. Warrants to purchase 4,200,000 shares vested with the funding of the initial $1,400,000.
The proceeds from the initial tranche will be primarily used by Petro-Victory to complete the previously announced proposed acquisition of a portfolio of producing oil and gas properties in Brazil. Accordingly, the collateral for the Note is a first lien security interest on shares of Petro-Victory Energia Ltda, a Brazilian subsidiary of Petro-Victory Energy. The Note is guaranteed by Petro-Victory Energy Corp. Details regarding the acquisition will be provided upon completion.
Richard F. Gonzalez, CEO of Petro-Victory, said, "We are pleased to close a substantial USD $10 million acquisition and growth financing facility. This funding allows us to create significant shareholder value with minimal dilution through the acquisition and development of oil and gas fields in proven, mature basins."
Corporate Update
The non-brokered private placement offering of common shares at a price of $0.05 per share for gross proceeds of up to CDN $4,000,000 (the "Offering") announced July 12, 2017 remains ongoing. An initial amount has been subscribed and will be submitted for approval to the Exchange.
The Bonus Warrants, pending acquisition and Offering have all been conditionally approved by the TSX Venture Exchange (the "TSXV") but are subject to final approval of the TSXV.
The Company and Patrick Yeghnazar, former CEO and a director, have mutually agreed to part ways. The Petro-Victory team thanks Mr. Yeghnazar for his efforts and contributions over the past year and wish him well in his future endeavors. Richard F. Gonzalez has been appointed CEO.