Petroleum Africa
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Tuesday, November 3, 2015
PetroMaroc Corp. intends to complete a secured, non-convertible debenture financing of Cdn $1.0 million with an arms’ length investor, the proceeds of which will be used for general working capital purposes. It is expected that the debenture will mature on April 10, 2016 and will bear interest at a rate of 15% per annum, calculated and payable in arrears, in cash, on the Maturity Date.
No warrants will be issued, and no commission and/or finders’ fee will be payable in connection with the Financing. The Debenture will be subject to a four-month hold period under Canadian securities laws from the date of issuance.
The obligations of the company under the Debenture will be secured by a security interest in the company’s present and after acquired property and, in connection therewith, the company and holder of the Debenture will execute a general security agreement under the laws of Jersey (Channel Islands) providing a security interest in favor of the Debenture holder. The Debenture will provide customary events of default including failure to pay interest when due within 30 days, failure to repay principal on redemption or maturity, and the occurrence of insolvency events or proceedings.
In connection with the issuance of the Debenture, PetroMaroc will enter into a priorities agreement with the Debenture holder and holders of the of the Cdn $9.7 million secured, convertible issued by the company on April 10, 2014, as amended by the waiver and amending agreement dated June 10, 2015 between the 2014 Debenture holders and the company, pursuant to which, among other things, the Debenture will rank as to principal and interest equally with the 2014 Debentures.
The company intends to refinance or repay the indebtedness under the Debenture through a future corporate restructuring process, in conjunction with restructuring of the 2014 Debentures.
The company is advancing discussions with a number of interested parties via the strategic and financial alternatives process, with a focus on relieving the financial burden of the company’s current debt structure, and obtaining additional financing necessary to fund ongoing operations. PetroMaroc is actively engaged in discussions with stakeholders to establish a more permanent solution to restructure the company’s debt and share capital, which may require a shareholders’ meeting. In order to fund current operational commitments and to fund additional evaluation of Sidi Moktar, PetroMaroc will be required to complete additional financings and/or incur additional debt in the future.
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