CALGARY, ALBERTA--(Marketwire -03/06/12)- Bridge Resources Corp. (the "Corporation") (TSX-V: BUK.V - News) announces the following details with respect to its financial reorganization plan (the "Plan"):
Purchase and Sale Agreement
Pursuant to the terms of a purchase and sale agreement (the "Purchase Agreement") dated March 6, 2012, Bridge Energy Inc., a wholly owned subsidiary of the Corporation, has agreed to sell a 36% working interest (of its 50% working interest) in the Willow Hamilton Development Area and has agreed in principle to sell an 85% working interest in its 100% leased Idaho acreage outside the Willow Hamilton Development Area (the "Idaho Acreage") to an arm's length private oil and gas Corporation based in Houston, Texas (the "Purchaser") in exchange for:
-- cash proceeds of US$1,500,000;-- a 6% net profits interest in the Willow Hamilton Development Area (the "Willow Hamilton NPI") to be issued to the Senior Lending Syndicate (defined below); and-- a 15% carried working interest in a US$8,000,000 exploration program on the Idaho Acreage (the "Idaho CWI").
The Purchase Agreement is subject to various conditions including but not limited to receiving the approval of the Corporation's shareholders (the "Shareholders") and the TSX Venture Exchange (the "TSXV") and the consent of a syndicate of banks led by the Royal Bank of Scotland (the "Senior Lending Syndicate") that provided the Corporation with a secured credit facility and certain members of the Senior Lending Syndicate that provided the Corporation with a US$500,000 credit facility (collectively, the "Credit Facilities"). The aggregate balance of secured debt, accrued interest and fees at the date of the Meeting (defined below) is expected to be approximately US$47.9 million.
Credit Facilities
The Corporation has reached an agreement in principle with the Senior Lending Syndicate with respect to a general release and discharge of all of the Corporation's obligations under the Credit Facilities. Subject to entering into definitive documentation and final credit committee approval from the Senior Lending Syndicate, the Corporation anticipates granting the Senior Lending Syndicate the following in exchange for a full and final release of all of the Corporation's obligations under the Credit Facilities:
-- the Willow Hamilton NPI;-- the 25% pre-tax net profits interest in UK Petroleum Production License P.1061 (the "Durango NPI");-- a 14% working interest (of its 50% working interest) in the Willow Hamilton Development Area;-- a 4.5% carried working interest in the Idaho Acreage;-- a 3% overriding revenue royalty interest over the Idaho CWI; and-- residual cash proceeds after the payment of certain trade creditors in Idaho.
Promissory Note
The Corporation has reached an agreement in principle with Conig 818 LLC ("Conig") with respect to a general release and discharge of all of the Corporation's obligations under a CDN$20,000,000 amended and restated unsecured subordinated convertible promissory note dated August 20, 2008, as amended and restated (the "Convertible Promissory Note") in addition to accrued interest thereon at the end of March 2012 of approximately CDN$178,243. Subject to the satisfaction of certain conditions precedent, including entering into definitive documentation, approval of the TSXV, and consent of the Senior Lending Syndicate, the Corporation will provide Conig the following in exchange for a full and final release of all of the Corporation's obligations under the Convertible Promissory Note:
-- a 3.5% carried working interest in the Idaho Acreage; and-- the issuance of a US$4,000,000 secured promissory note with a term of 18 months from the date of closing of the transactions described herein and an interest rate of 10% per annum (which interest may be fully satisfied by the issuance of shares during the first 12 months, and thereafter through the payment of cash). The note will also provide that the Corporation may fully satisfy the note through the payment of cash in the amount of $2,000,000 on or before December 31, 2012, or $3,000,000 during the period of January 2, 2013 to September 29, 2013.
Annual and Special Meeting
The foregoing transactions constitute a sale of all or substantially all of the property and assets of the Corporation.
In order to complete the Plan, the Corporation will hold an annual and special meeting of Shareholders on March 30, 2012 (the "Meeting") to approve, among other matters:
-- the sale of all or substantially all of the property and assets of the Corporation to the Purchaser, subject to TSXV approval;-- the consolidation of the Shares on a 100 for 1 basis (resulting in the 166,055,895 pre- consolidation Shares that are currently outstanding being reduced to approximately 1,660,558 post-consolidation Shares), subject to TSXV approval; and-- the change of the Corporation's name to "Idaho Natural Resources Corp.", subject to TSXV approval.
The board of directors believes that the consolidation of the Shares should enhance their marketability as an investment and should facilitate additional financings to fund operations in the future.
At closing, the Corporation further intends to settle $246,500 owing to its former management and current management and directors via a combination of cash and the issuance of Shares or options pursuant to TSX-V Policy 4.3, Shares For Debt.
Upon completion of the Plan, the Corporation's sole asset will be a 7.0% carried working Interest in the Idaho Acreage representing 46.7% of the Idaho CWI. In the absence of completing the Plan, the Corporation will be forced to file for bankruptcy protection.