Energy company issues 18-month 8% convertible notes in two tranches
By Devika Patel
Knoxville, Tenn., Feb. 4 - MegaWest Energy Corp. said it settled a private placement of senior secured convertible notes. The company raised $1.2 million on Jan. 6 and $2.8 million on Friday for a total of $4 million.
The notes, which mature in 18 months, are convertible into common stock at $0.02 per share, a 50% discount to the Jan. 5 closing share price of $0.04.
They are redeemable in cash at any time at par plus interest if company shares trade at or above C$0.25 for 20 consecutive trading days and the daily average trading volume has been in excess of $75,000 per day for the same 20-day period. The coupon is 8% in cash and 12% in kind.
Proceeds will be used to fund a portion of the company's capital expenditures and operating expenses.
MegaWest, based in Calgary, Alta., is an energy company.
| Issuer: | MegaWest Energy Corp.
|
| Issue: | Senior secured convertible notes
|
| Amount: | $4 million
|
| Maturity: | 18 months
|
| Coupon: | 8% in cash, 12% in kind
|
| Price: | Par
|
| Yield: | 8% in cash, 12% in kind
|
| Conversion price: | $0.02
|
| Conversion discount: | 50%
|
| Call: | Any time
|
| Warrants: | No
|
| Settlement dates: | Jan. 6 (for $1.2 million), Feb. 4 (for $2.8 million)
|
| Stock symbol: | OTCBB: MGWSF
|
| Stock price: | $0.03 at close Jan. 6
|
| Market capitalization: | $4.4 million
|
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