By Susanna Moon
Chicago, May 11 - Shoreline Energy Corp. said it filed a preliminary short form prospectus for a public offering of up to C$10 million principal amount of 9.25% convertible subordinated debentures due June 30, 2015.
The convertibles will be sold at par of C$1,000 each.
The conversion rate is 129.03 shares per C$1,000 principal amount of notes, which is equivalent to a conversion price of C$7.75. That is a 51.4% premium over the company's closing share price on Thursday.
The convertibles are not redeemable for two years and a day after issue unless a change of control has occurred. After that, the notes may be called at 102% of par plus accrued interest if the weighted average trading price of the shares is at least 125% of the conversion price for the 20 consecutive trading days ending five trading days prior to the date on which notice of redemption is given, according to a company press release.
Macquarie Private Wealth Inc. will sell the notes on a commercially reasonable efforts basis.
Proceeds will initially be used to reduce bank debt and accelerate the company's oil development program in the Peace River Arch area of northwest Alberta.
Shoreline Energy is a junior crude oil and natural gas exploration and production company.
| Issuer: | Shoreline Energy Corp.
|
| Issue: | Convertible subordinated debentures
|
| Amount: | C$10 million
|
| Maturity: | June 30, 2015
|
| Coupon: | 9.25%
|
| Price: | Par
|
| Conversion rate: | 129.03
|
| Conversion price: | C$7.75
|
| Conversion premium: | 51.4%
|
| Call option: | At 102% of par plus accrued interest after two years and one day subject to 125% hurdle
|
| Agent: | Macquarie Private Wealth Inc.
|
| Pricing date: | May 11
|
| Stock symbol: | Toronto: SEQ
|
| Stock price: | $5.12 at close May 10
|
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