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Storm Cat Energy Corporation Announces Series A and Series B Convertible Debt Placement and Third Quarter 2006 Reserves
Storm Cat Energy Corporation Announces Series A and Series B Convertible Debt Placement and Third Quarter 2006 Reserves.
About this update from Sama Resources Inc.
[{"type":"text","content":"\n\n\n\nDENVER & CALGARY, January 19 /CNW/ - Storm Cat Energy Corporation (AMEX:\nSCU; TSX: SME) announced today that it proposes to issue up to US$50.0 million\nin aggregate principal amount of 9.25% five-year subordinated convertible\nnotes comprising up to US$19.0 million of Series A convertible notes and up to\nUS$31.0 million of Series B convertible notes, both due in 2012, to qualified\ninstitutional investors in private placements pursuant to Regulation D of the\nSecurities Act of 1933, as amended. The notes will be convertible into Storm\nCat common shares at a price of US$1.17 per share, as may be adjusted in\naccordance with the terms of the notes, and the Company may force the\nconversion of the notes at any time after 18 months if Storm Cat's common\nshares trade above US$2.05, as may be adjusted, for 20 days within a period of\n30 consecutive trading days.\n\n\nThe Company will use the net proceeds from the sale of the notes to fund\nits 2007 US capital expenditure budget requirements, and to repay the\nremaining US$7.5 million of mezzanine debt that was borrowed in connection\nwith the previously announced Powder River Basin acquisition completed in\nAugust 2006.\n\n\nThe completion of the note placement is subject to the acceptance of the\nToronto Stock Exchange and the American Stock Exchange. In addition, while the\nSeries A note placement is expected to close promptly upon the receipt of the\nrequired regulatory approvals, the completion of the Series B note placement\nis subject to shareholder approval, which approval will be sought at a special\ngeneral meeting of shareholders expected to be held in the first half of March\n2007. Upon closing of each series of notes, the Company will be obligated to\nfile with the U.S. Securities and Exchange Commission a resale registration\nstatement relating to the common shares to be issued upon conversion of the\nnotes.\n\n\nThe securities offered in the private placements have not been registered\nunder the Securities Act of 1933 or any state securities laws, and unless so\nregistered may not be offered or sold in the United States, except pursuant to\nan exemption from, or in a transaction subject to, the registration\nrequirements of the Securities Act of 1933 and applicable state securities\nlaws. This press release is issued pursuant to Rule 135c of the Securiti...