CGX Energy Inc V.OYL

News

[Devanand1]

https://fronteraenergy.mediaroom.com/2022-03-10-CGX-and-Frontera-Announce-U-S-35-Million-Loan-Agreement

[Gtboy]

This is very positive for us in many respects. It shows the confidence in FEC in the future of CGX. No investor will want to throw away 35m at a deep discount if they didnt feel strongly that the share price is going to reach and exceed 3.10. although I do say that the interest rate is quite high so thats how they will be compensated for their risk of 3.10. Also lets note the statement that its

[Beaner1814]

This is not about throwing away money. This is completely about control and retaining that control. The statement regarding dilution is an absolute give away, which may mean that there have been offers that would do just that.  The previous circular alluded to the company looking for financing in March 2022. This injection is likely the amount necessary to keep the company afloat for the

[westcanpride]

You summed up everything perfectly Beaner1814! I will also add this past weeks crash in share price is now a perfect example of stock manipulation for the benefit of well-connected insiders. That $3.10 CAD/$35MM USD loan was agreed upon I guarantee weeks ago. As such, I guaranteed if retail had caused that crash in share price through massive shorting, CGX would have released this updated

[waitingstill]

Beaner - I am not sure about the great concern that FEC wants their money repaid if CGX inks a deal with a JV. I would think that is only natural and, in fact, gives CGX some leverage in their bargaining. IMO, $35mil will be a small amount of what comes in any reasonable JV deal and it would only make sense that CGX uses new money to pay off old loans. What it is telling CGX (and any JV) is that

[Beaner1814]

I believe we are of the same mind, but looking at the issue differently. I too would want to see they pay back the 35mil rather than convert the debt, even if it is only 1%. What I am primarily miffed about is the sloppy public acknowledgment of the exception to seeking minority shareholder approval prior to CGX making the necessary release to shareholders and the stipulation that any approval

[Miftee9]

Actually, the interest rate is not that high.  This is a high risk loan and is much cheaper than giving up equity.  You cannot compare it to conventional loans that have lots of security around it.  This is a great outcome for CGX.

[AVandelay]

Can CGX repay the loan from Froterra by issuing shares at CGX's option?  The press release reads that it is only at Fronterra's option that the loan can be converted to CGX shares.  If CGX doesn't have the funds to repay the loan by July 31, couldn't Fronterra just seize the loan collateral (i.e., all the assets of CGX, and specifically the lease interests)?  Come

[Beaner1814]

First question: without more (ie the express terms of the Agreement), unlikely given the release. Remember within the offering and then confirmed in the more recent audit, FEC more than likely has included another no-dilution clause which may operate in a very similar way to the repayment of the bridge loan under the offering (ie the Agreement states that they will pay 3.10 per share but if CGX