By Lisa Kerner
Charlotte, N.C., June 19 – Harvest Natural Resources, Inc. agreed to issue a $25.23 million five-year 15% senior secured nonconvertible note and a $6.97 million five-year 9% senior secured convertible note to CT Energy Holding SRL.
CT Energy, a Venezuelan-Italian consortium, will also acquire a warrant to purchase up to 34,070,820 shares of Harvest’s common stock at an exercise price of $1.25 per share. The warrant becomes exercisable only after the 30-day volume-weighted average price of Harvest’s common stock equals or exceeds $2.50 per share and Harvest’s stockholders approve the transaction, according to a news release.
The convertible note is immediately convertible into 8,506,097 shares of Harvest common stock, or roughly 19.9% of Harvest’s currently outstanding common stock. The conversion ratio is equivalent to a conversion price of $0.82 per share, which is a 56.6% discount to the company’s $1.89 closing share price on June 18.
Harvest will receive proceeds of $32.2 million from the sale of the notes and could realize additional proceeds of $42.5 million from the full exercise of the warrants.
Proceeds will be used to repay existing long-term debt and to reposition Harvest for long-term growth, both in Venezuela and Gabon, the company said.
Also, Harvest is issuing to CT Energy 69.75 shares of a newly created series of preferred stock that will entitle the holder to vote on an “as-if” converted basis.
Harvest also announced it entered into a strategic partnership with CT Energy and CT Energia Holding, Ltd., an international energy trading firm, to maximize the long-term success and value of Harvest’s Venezuelan operations and its 20.4% investment in Petrodelta SA.
Harvest Natural Resources is a Houston independent oil and gas exploration and development company.
| Issuer: | Harvest Natural Resources, Inc.
|
| Issue: | Senior secured nonconvertible note, senior secured nonconvertible note
|
| Amount: | $32,195,000
|
| Warrant: | For up to 34,070,820 shares
|
| Warrant strike price: | $1.25
|
| Purchaser: | CT Energy Holding SRL
|
| Pricing date: | June 19
|
| Distribution: | Private placement
|
| Stock symbol: | NYSE: HNR
|
| Stock price: | $1.89 at close June 18
|
| Market capitalization: | $77.8 million
|
|
|
| Note
|
| Issue: | Senior secured nonconvertible note
|
| Amount: | $25,225,000
|
| Coupon: | 15%
|
| Maturity: | Five years
|
|
|
| Convertible note
|
| Issue: | Senior secured convertible note
|
| Amount: | $6.97 million
|
| Coupon: | 9%
|
| Maturity: | Five years
|
| Conversion ratio: 8,506,097 shares
|
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