By Stephanie N. Rotondo
Phoenix, May 8 – EnerJex Resources Inc. priced $2.3 million 10% series A cumulative redeemable perpetual preferred stock in an add-on offering, the company said in a press release on Friday.
The preferreds were offered on a firm commitment basis via Northland Securities Inc. and Euro Pacific Capital Inc. The $25-par preferreds were sold at $12.50, a 21% discount to Thursday’s closing price of $15.65.
Dividends are payable monthly. Should the company fail to pay the dividends in full for six consecutive or non-consecutive periods, the dividend will increase to 12% and another 1% for each further missed payment, up to 15%.
The penalty rate will also go into effect if the preferreds are delisted.
The preferreds become redeemable on or after June 16, 2017 at par plus accrued dividends. The company can also redeem the issue upon a change of control. If that occurs prior to the redemption date, the shares will be redeemed at a premium on a sliding scale basis.
Proceeds will be used to pay down a portion of the company’s credit facility, to fund an escrow account for the purpose of paying dividends on the preferreds through Nov. 1 and for general working capital purposes.
EnerJex is a San Antonio-based oil and gas company.
| Issuer: | EnerJex Resources Inc.
|
| Securities: | Series A cumulative redeemable preferred stock
|
| Amount: | $2.3 million, or 183,433 shares
|
| Maturity: | Perpetual
|
| Bookrunners: | Northland Securities Inc., Euro Pacific Capital Inc.
|
| Dividend: | 10%
|
| Penalty rate: | 12%, up to a maximum of 15%
|
| Price: | $12.50
|
| Par: | $25.00
|
| Call options: | On or after June 16, 2017 at par plus accrued dividends; upon a change of control at a premium plus accrued dividends
|
| Pricing date: | May 8
|
| Settlement date: | May 13
|
| Stock listing: | NYSE: ENRJP
|
| Stock price: | $15.65 as of Thursday’s close
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