By Laura Lutz
Washington, March 12 - Arapahoe Energy Corp. plans to complete a private placement of units for up to C$10.5 million and at least C$8.5 million.
The company plans to sell debenture units at C$1.00 per unit. Each unit will include C$1.50 principal of a convertible secured debenture and four warrants.
The debentures will bear interest at 20% per year and mature in two years.
The company will be able to prepay the debentures in whole any time before Aug. 31.
The conversion features of the debentures are subject to shareholder approval at a July 31 meeting. If the shareholders do not approve the conversion terms, the company will be required to exercise its prepayment right.
If the proposed conversion features are approved, they would be convertible into common shares at C$1.00 per share. The company would be able to force conversion if the trading price of its common shares is at least C$0.65 for 20 trading days.
Each warrant will be exercisable for one common share at C$0.125 for two years.
D&D Securities Co., the agent, has received verbal expressions of interest for C$9 million of the offering, according to an Arapahoe news release on Monday.
Management, officers, directors, insiders and futures directors, officers and insiders are expected to subscribe for about C$750,000.
Settlement is expected on March 30.
Of the proceeds, C$6 million will be used to pay trade payables. The rest will be used for capital expenditures and working capital.
Arapahoe is an oil and gas company based in Calgary, Alta.
| Issuer: | Arapahoe Energy Corp.
|
| Issue: | Units of C$1.50 principal of convertible secured debenture and four warrants
|
| Amount: | C$10.5 million (maximum); C$8.5 million (minimum)
|
| Units: | 10.5 million (maximum); 8.5 million (minimum)
|
| Unit price: | C$1.00
|
| Debenture amount: | C$1.50
|
| Maturity: | Two years
|
| Coupon: | 20%
|
| Conversion price: | C$1.00 per share
|
| Warrants: | Four per unit.
|
| Warrant expiration: | Two years
|
| Warrant strike price: | C$0.125
|
| Agent: | D&D Securities Co.
|
| Pricing date: | March 12
|
| Settlement date: | March 30
|
| Stock symbol: | TSX Venture: AAO
|
| Stock price: | C$0.10 at close March 9
|
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