RE:RE:RE:CEO REDEEMS $ 8,679,500 In Convertible Debentures !!! CALGARY, AB --(Marketwired - April 11, 2016) - Kelt Exploration Ltd. (TSX: KEL)
THIS NEWS RELEASE MAY NOT BE DISTRIBUTED IN THE UNITED STATES OR DISSEMINATED OVER UNITED STATES NEWSWIRE SERVICES
Kelt Exploration Ltd. ("Kelt" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of underwriters (the "Underwriters"), co-led by Peters & Co. Limited and FirstEnergy Capital Corp., pursuant to which the Underwriters will purchase $65.0 million principal amount of convertible subordinated unsecured debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering"), on a "bought deal" basis.
In conjunction with the Offering, Kelt has agreed to issue to certain directors, officers and employees of the Company, along with certain other subscribers, on a non-brokered basis, an additional $15.0 million principal amount of Debentures at a price of $1,000 per Debenture (the "Private Placement"). The Debentures issued in connection with the Private Placement will be subject to a statutory hold period of four months plus one day from the date of completion of the Private Placement, in accordance with applicable securities legislation.
Net proceeds from the Offering and the Private Placement (collectively, the "Debenture Offerings") will initially be used to pay down existing bank credit facilities and thereafter, for general corporate and working capital purposes.
The Debentures will mature and be repayable on May 31, 2021 (the "Maturity Date") and will accrue interest at the rate of 5.0% per annum payable semi-annually in arrears on May 31st and November 30th of each year (each an "Interest Payment Date"), commencing on November 30, 2016. 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) if called for redemption, 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 $5.50 per share, subject to adjustment in certain events (the "Conversion Price"). This represents a conversion rate of approximately 181.8182 common shares for each $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 immediately prior 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 to the extent subordinated on the same terms.
The Debentures may not be redeemed by the Corporation prior to May 31, 2019. On and after May 31, 2019 and prior to May 31, 2020, 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 volume weighted average trading price of the Common Shares on the TSX 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. On or after May 31, 2020 and prior to the Maturity Date, 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.