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CGX Energy and Frontera Announce Amended Letter Agreement and Shares for Debt Settlement
Toronto, Ontario--(Newsfile Corp. - December 17, 2018) - CGX Energy Inc. (TSXV: OYL) (" CGX ")...
About this update from Frontera Energy Corporation
[{"type":"text","content":"CGX Energy and Frontera Announce Amended Letter Agreement and Shares for Debt SettlementToronto, Ontario--(Newsfile Corp. - December 17, 2018) - CGX Energy Inc. (TSXV: OYL) (\"CGX\") and Frontera Energy Corporation (TSX: FEC) (\"Frontera\") announced today that they have amended a letter agreement previously disclosed in a news release of CGX and Frontera on December 4, 2018 to enter into a debt settlement transaction and amend the convertible amount under a bridge loan facility. Shares for Debt SettlementCGX and Frontera have entered into a debt settlement agreement with respect to the settlement of US$1,200,000 of debt owing to Frontera by CGX through the issuance of 5,714,285 common shares of CGX (the \"Common Shares\") at a deemed price of US$0.21 (or CDN$0.2775) per Common Share (the \"Debt Settlement\"). The deemed price per Common Share is a 25% discount to the closing price of the Common Shares on the TSX Venture Exchange (the \"TSXV\") on December 14, 2018. The completion of the Debt Settlement is subject to the approval of the TSXV.The Debt Settlement is another step that CGX is seeking to undertake in order to restructure its liabilities and provide for sufficient working capital to enable it to advance its offshore exploration projects in Guyana. CGX does not have sufficient cash to repay this liability and therefore the Debt Settlement improves the liquidity position of CGX.  Frontera currently owns 50,351,929 Common Shares, which represents approximately 45.6% of the issued and outstanding Common Shares. Upon completion of the Debt Settlement, Frontera will own 56,066,214 Common Shares, which represents approximately 48.3% of the issued and outstanding Common Shares on a partially-diluted basis.Convertible Bridge LoanAs disclosed in the news release of CGX and Frontera dated December 4, 2018, Frontera will seek regulatory approval to amend the terms of its April 25, 2018 bridge loan. Subject to TSXV approval, the amendment will now provide that the maximum amount of the principal that may be repaid in Common Shares at a conversion price of US$0.22 (being the U.S. dollar equivalent of the closing price of the Common Shares on the TSXV on December 4, 2018) shall be US$8,800,000.As a result of these transactions, Frontera could increase its ownership of the outstanding Common Shares from its current ownership of ...