By Susanna Moon
Chicago, Sept. 2 - Kairiki Energy Ltd. said it plans to sell up to $10 million of convertible notes in two tranches to IMC Group.
The notes will pay interest of 12% per year. The repayment date is three years from the initial drawdown under the facility.
The first tranche of $8.5 million will be placed under the company's 15% capacity under the ASX listing rule. The remaining $1.5 million must be approved by shareholders and is scheduled for October.
The notes are convertible into common shares at the lesser of A$0.185 and A$0.16 if the stock closes below A$0.16.
Holders may convert the notes at any time, up to a limit of three conversions with each one into at least 10 million shares.
Kairiki may give notice until Jan. 31 to repay up to 50% of the outstanding amount.
From Jan. 1 to Jan. 15 of each year, noteholders may require the company to repay a portion of the outstanding amount of the notes.
Noteholders have the right to full repayment of the outstanding amount on the occurrence or non-fulfillment of specified events or conditions before Jan. 31. If Kairiki and IMC fail to enter into the alliance agreement by Dec. 1 or the non-fulfillment of other specified conditions by Jan. 31 through willful breach, Kairiki will be liable for a break fee of $1 million.
The company said it reached the agreement in principle with the IMC Group, which has a 5.48% stake in Kairiki, to secure funding for its drilling program.
Kairiki is a West Perth, Australia-based oil and gas exploration company.
| Issuer: | Kairiki Energy Ltd.
|
| Issue: | Convertible notes
|
| Amount: | $10 million
|
| Maturity: | Three years from initial drawdown
|
| Coupon: | 12%
|
| Conversion price: | Lesser of A$0.185 and A$0.16 if stock closes below A$0.16
|
| Warrants: | No
|
| Call option: | Until Jan. 31, 2009 for up to 50% of the outstanding amount
|
| Put option: | From Jan. 1 to Jan. 15 of each year, noteholders may require the company to repay a portion of the outstanding amount of the notes
|
| Investor: | IMC Group
|
| Pricing date: | Sept. 2
|
| Stock symbol: | ASX: KIK
|
| Stock price: | A$0.23 at open on Sept. 2
|
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