Petroleum Africa
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Monday, March 3, 2014
Oando Energy Resources Inc. (OER) closed its previously announced private placement of units for proceeds of $50 million. In addition, OER converted to equity amounts outstanding under the $1.2 billion facility agreement dated February 10 with Oando Plc.
Under the private placement, the company issued 35,070,063 common shares and 17,535,031 common share purchase warrants (for gross proceeds of $50 million (each common share and half-warrant, a “Unit”) at a price of C$1.57 per Unit. Each whole warrant will entitle the holder thereof to acquire one common share of OER at a price of C$2.00 per common share for a period of 24 months from the date of the closing of ConocoPhillips’(COP) Nigerian business units. If, after a period of six months from the closing of the COP acquisition, the closing price of common shares of the company on the TSX is greater than C$3.50 for a period of at least 10 consecutive trading days, the warrants will expire within 30 days. The securities issued are subject to a hold period, which will expire on June 27, 2014.
Further to its press release of February 10, OER has issued 432,565,768 Units to Oando Resources Ltd., a wholly-owned subsidiary of Oando Plc, as repayment of principal and interest outstanding under the Oando loan. The Units have the same terms as the Units issued pursuant to the private placement. Prior to the completion of the private placement and the Conversion, Oando Plc directly owned, and exercised control or direction over, 100,339,052 Common Shares, representing 94.6% of OER’s issued and outstanding common shares. As a result of the completion of the Private Placement and the Conversion, Oando Plc currently beneficially owns, or exercises control or direction over, 532,904,820 common shares, representing 92.9% of the company’s issued and outstanding Common Shares. Assuming exercise of the warrants issued to Oando Plc in connection with the Conversion, Oando Plc would beneficially own, or exercise control or direction over, 749,187,704 Common Shares, representing 94.8% of its issued and outstanding Common Shares; however, Oando Plc is restricted from exercising any warrants that would result in its ownership of the Company exceeding 94.6%.
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