News Bengal Energy Ltd (C-BNG) - News Release
Bengal Energy arranges $3.5-million placement
2013-01-21 09:04 ET - News Release
Shares issued 52,110,177
BNG Close 2013-01-18 C$ 0.57
Mr. Chayan Chakrabarty reports
BENGAL ENERGY ANNOUNCES $3.5 MILLION PRIVATE PLACEMENT OF CONVERTIBLE AND NON-CONVERTIBLE NOTES
Bengal Energy Ltd. intends to complete a non-brokered private placement of $3.5-million of short-term, convertible and non-convertible notes. The Private Placement will assist the Company in accelerating its drilling schedule for Cuisinier, Tookoonooka and the recently discovered Caracal projects and will act as bridge financing pending receipt of additional cash flow from Cuisinier production. Production from the Company's existing eight (gross) Cuisinier wells is expected to increase early in calendar Q2 2013 as facilities and pipeline commissioning is completed. The Company has no other long term or bank debt. Members of the Board of Directors of the Company are expected to subscribe for approximately 85% of the principal amount of the notes being issued in the Private Placement, reflecting their confidence in the Company's business plan and growth prospects.
The Private Placement consists of the placement of: (i) $1,750,000 aggregate principal amount of non-convertible notes ("Non-Convertible Notes") bearing an interest rate of prime plus 3% per annum and having a term of 180 days; and (ii) $1,750,000 aggregate principal amount of convertible notes ("Convertible Notes" and together with the Non-Convertible Notes, the "Notes") bearing an interest rate of prime plus 3% per annum and having a term of 180 days. The Convertible Notes will be convertible into common shares ("Common Shares") in the capital of the Company at a conversion price equal to the lower of the five day volume weighted average price of the Common Shares as at: (A) the issue date of the Convertible Notes, and (B) the date of conversion of some or all of the principal amount of the Convertible Notes; provided that the conversion price shall not be lower than that conversion price that would require the Company to seek shareholder approval of the issuance of Common Shares on conversion of some or all of the principal amount of the Convertible Notes pursuant to the policies of the Toronto Stock Exchange ("TSX"). All interest payable under the Notes is payable in cash. The principal amount of the Notes shall be redeemable, at the Company's option, in whole or in part, at any time and from time to time, for cash, provided that any partial redemption is subject to a minimum redemption in the amount of $50,000 of aggregate principal amount outstanding. Certain directors of the Company are expected to acquire approximately $1,500,000 principal amount of the Convertible Notes and $1,500,000 principal amount of the Non-Convertible Notes issued pursuant to the Private Placement.
The net proceeds of the Private Placement will be used to help fund the Company's capital program and for general corporate purposes. Completion of the Private Placement is subject to receipt of all necessary regulatory approvals, including the approval of the TSX. The Private Placement is expected to close on or about January 23, 2013.
We seek Safe Harbor.