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Third Point converts Baseline notes, maintains 66.9% stake
By Jennifer Chiou
New York, July 18 - Baseline Oil & Gas Corp. investors led by Third Point LLC reported taking steps to convert $44.65 million of its $49.15 million of Baseline's 14% senior secured convertible notes into 62,018,850 shares, according to a schedule 13-D/A filing with the Securities and Exchange Commission.
Now, the investors own 62,504,950 shares and $4.5 million of convertibles, thus maintaining beneficial ownership of 68,755,450 shares or a 66.9% stake in the company.
The conversion price for the notes is $0.72 per share and as a result, each $1,000 principal amount of notes is convertible into 1,388.89 common shares.
On July 18, Third Point reported being in "productive" conversation with Baseline management about naming its three proposed board members, according to a previous schedule 13-D/A filing.
As already reported, "promptly following" filing of a prior 13D, Third Point had said it planned to contact the company to discuss obtaining majority control of the board. Since the previous filing, the company has had conversations with the chairman and chief executive officer of the company, another board member and counsel to the company.
Third Point noted that the conversations were "productive" and that during the discussions, it proposed that Bradley L. Radoff, Todd Q. Swanson and John V. Lovoi be added to the company's board.
As previously noted, if Third Point is not permitted to designate a majority of the board, it will act by written consent to remove and replace the directors so that it obtains control.
Baseline is a Houston-based oil and gas exploration and drilling firm.
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