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ZaZa Energy to exchange $47.3 million notes, access capital markets
Noteholders will receive common stock, new preferreds in exchange
By Angela McDaniels
Tacoma, Wash., March 31 - ZaZa Energy Corp. plans to take out its $47.3 million of subordinated notes, refinance its $15 million of outstanding 8% senior secured notes due 2017 and access the capital markets over the next year, according to the company's latest 10-K filing with the Securities and Exchange Commission.
The initiatives are part of the company's plan to improve its balance sheet and capital structure. It expects to access the capital markets by issuing equity and debt securities to fund its cash needs.
ZaZa was formed in August 2011 through a combination of ZaZa Energy, LLC with Toreador Resources Corp. The subordinated notes were issued to the ZaZa founders - president and chief executive officer Todd Brooks and directors Gaston Kearby and John Hearn Jr. - in exchange for some unpaid compensation amounts owed to them.
In exchange for the $15.8 million of notes held by him, each ZaZa founder will receive 3.16 million common shares and $12.8 million of 13% series A cumulative redeemable preferred stock.
The exchange is conditional on the company refinancing its 8% notes, which were issued in a private placement in February 2012.
In a separate filing with the SEC on Monday, the company said it arranged a $10 million at-the-market issuance sales agreement with MLV & Co. LLC. Proceeds will be used for general corporate purposes, including capital expenditures, acquisitions, working capital and debt repayment or refinancing.
ZaZa is an oil and gas exploration and production company is based in Houston.
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