Energy company issues 18-month 8% convertible notes in three tranches
By Devika Patel
Knoxville, Tenn., March 17 - MegaWest Energy Corp. said it settled another tranche of a private placement of senior secured convertible notes. The company raised $1.2 million on Jan. 6, $2.8 million on Feb. 4 and $600,000 in the latest closing for a total of $4.6 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.
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Issue: | Senior secured convertible notes
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Amount: | $4.6 million
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Maturity: | 18 months
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Coupon: | 8% in cash, 12% in kind
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Price: | Par
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Yield: | 8% in cash, 12% in kind
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Conversion price: | $0.02
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Conversion discount: | 50%
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Call: | Any time
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Warrants: | No
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Settlement dates: | Jan. 6 (for $1.2 million), Feb. 4 (for $2.8 million), March 17 (for $600,000)
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Stock symbol: | OTCBB: MGWSF
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Stock price: | $0.03 at close Jan. 6
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Market capitalization: | $6 million
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