By Laura Lutz
Des Moines, July 6 - Ausam Energy Corp. secured $25 million from a private placement of a senior secured convertible debenture with The Huff Energy Fund.
The five-year debenture bears interest at 9% per year, payable quarterly. For the first two years, interest payments may be satisfied by an increase in the principal amount.
The debenture is convertible at any time into common shares at C$0.60 per share.
Ausam may force conversion if, at any time more than 30 months after issuance, the 30-day volume weighted average price of its common shares is above C$0.90 and the trading volume for the 30-day period is at least 1 million pre-consolidation shares per day.
The principal amount will be increased at maturity if the volume-weighted average price of the company's shares is above C$0.60. At maturity, the company will pay up to $37.5 million in cash for the debenture; the balance will be paid in shares.
Huff also received 954,841 shares and warrants for 22,305,496 shares. The warrants are exercisable at C$0.60 per share for five years.
Cosco Capital Management LLC acted as agent.
Proceeds will be used for the company's Gulf Coast projects.
Ausam is an oil and gas exploration company based in Calgary, Alta.
| Issuer: | Ausam Energy Corp.
|
| Issue: | Senior secured convertible debenture
|
| Amount: | $25 million
|
| Maturity: | Five years
|
| Coupon: | 9%, with option to pay in kind for first two years
|
| Price: | Par
|
| Yield: | 9%
|
| Conversion price: | C$0.60
|
| Shares: | 954,841
|
| Warrants: | For 22,305,496 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | C$0.60
|
| Agent: | Cosco Capital Management LLC
|
| Investor: | The Huff Energy Fund
|
| Announcement date: | July 5
|
| Stock symbol: | TSX Venture: AUZ
|
| Stock price: | C$0.47 at close July 5
|
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