Leader may repurchase C$12.56 million of C$13.16 million convertibles

By Devika Patel

Knoxville, Tenn., Jan. 25 - Leader Energy Services Ltd. announced it agreed to repurchase C$12.56 million, or 95.4%, of its C$13.16 million of remaining 10% convertible subordinated debentures due March 31, 2012. The company will pay 110 for the convertibles, along with C$1.4 million in deferred interest and C$630,000 in accrued interest, for a total of C$15.99 million.

The company issued C$15 million of the convertibles on Feb. 28, 2007. They are convertible at C$0.40 per share. As of Jan. 24, C$1.84 million of debentures has been converted.

The company also said it has negotiated a term sheet with a new investor for a C$15 million three-year 12% secured debt facility.

At settlement, the investor also will receive 4 million three-year warrants, each exercisable at a 15% premium to the five-day volume weighted average share price on the settlement date, which is expected to be Feb. 15.

In addition to the proceeds from the new facility, Leader will use its existing working capital to refinance the convertible debt.

"These are two significant developments for our company," President Rod Hauser said in a press release. "In addition to extending the term of our debt facility by two years we will be able to eliminate the likelihood of significant dilution in the number of shares outstanding had our debentures remained in place. More than 31 million shares could have been issued at a conversion price of $0.40 had these remaining debentures been converted."

Based in Calgary, Alta., Leader is a provider of well stimulation and cementing services.

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