By Jennifer Chiou
New York, July 7 - Esprit Energy Trust said it will offer C$100 million of extendible convertible unsecured subordinated debentures.
The debentures pay a 6.5% coupon and have an initial maturity of Aug. 31, which will automatically extend to Dec. 31, 2010 upon closing of two planned acquisitions by the company.
The debentures are convertible into trust units of Esprit at C$13.85 per trust unit plus accrued interest.
CIBC World Markets Inc. and Scotia Capital Inc. lead a syndicate of underwriters.
The company plans to use proceeds for the C$98.7 million acquisition of two privately held Calgary, Atla.-based oil and gas producers. Esprit will also assume bank debt and a working capital deficiency of about C$2.6 million.
"These acquisitions are a good fit for Esprit," said Steve Savidant, president and chief executive officer, in a news release.
"The value is in the very significant upside we see in reserves and, most of all, production, which can be realized through further development drilling."
Calgary-based Esprit, a natural gas weighted income trust, said the acquisitions and a 2006 drilling program will grow its production.
| Issuer: | Esprit Energy Trust
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| Issue: | Extendible convertible unsecured subordinated debentures
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| Amount: | C$100 million
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| Maturity: | Aug. 31, extending to Dec. 31, 2010 upon closing of acquisitions
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| Coupon: | 6.5%
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| Conversion price: | C$13.85
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| Underwriters: | CIBC World Markets Inc. and Scotia Capital Inc. (joint leads)
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| Pricing date: | July 7
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| Settlement: | July 28
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