CALGARY, ALBERTA--(Marketwire - Feb. 9, 2012) -
NOT FOR RELEASE OVER UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
NAL Energy Corporation (TSX:NAE) ("NAL" or the "Corporation") today announced it has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets, BMO Capital Markets and CIBC to sell to the public, on a bought deal basis, $100 million principal amount of 6.25% convertible unsecured subordinated debentures maturing March 31, 2017 (the "Debentures"). NAL has also granted the underwriters an over-allotment option to purchase up to an additional $15 million of Debentures on the same terms, exercisable in whole or in part for a period of 30 days following closing. If the over-allotment option is exercised in full, the total gross proceeds to NAL from the sale of Debentures will be approximately $115 million. Closing is expected to occur on or about February 21, 2012.
NAL will use the net proceeds of this financing to repay outstanding indebtedness under the Corporation's existing bank credit facility, to fund the maturity of the existing 6.75% convertible unsecured subordinated debentures due August 2012 and for general corporate purposes.
The Debentures have a face value of $1,000 per debenture, a coupon of 6.25%, a maturity date of March 31, 2017, and will be convertible into common shares at the option of the holder at a conversion price of $9.90 per common share. The Debentures will pay interest semi-annually in arrears on March 31 and September 30 of each year, commencing September 30, 2012. The Debentures will not be redeemable prior to March 31, 2015. On and after March 31, 2015 and prior to the maturity date, the Debentures may be redeemed by the Corporation, in whole or in part from time to time, on not more than 60 days and not less than 40 days prior notice at a redemption price equal to their principal amount plus accrued and unpaid interest, if any, up to but excluding the date set for redemption, provided that the weighted average trading price of the common shares on the TSX for the 20 consecutive trading days ending five trading days prior to the date on which notice of redemption is provided is at least 125% of the conversion price.
The Debentures will be issued by way of a prospectus supplement that will be filed with securities regulatory authorities in all provinces of Canada under NAL's short form base shelf prospectus dated May 12, 2011, which was previously filed with securities regulatory authorities in each province in Canada.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
Forward Looking Statements
Statements about the Corporation's expectations and all other statements in this news release, other than historical facts, are "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information relies on a number of assumptions concerning future events and is subject to a number of uncertainties and factors, many of which are outside of the Corporation's control, which could cause actual results to differ materially from such statements. Forward-looking information in this news release includes, but is not limited to, the successful completion of the offering and the use of the proceeds from the offering. No assurance can be given that any of the events anticipated by the forward-looking information and statements will transpire or occur or, if any of them does so, what benefit the Corporation will derive from them.
NAL Energy Corporation generates returns for its shareholders by pursuing a strategy of acquiring, producing and selling crude oil, natural gas and natural gas liquids from assets based in southeastern Saskatchewan, central Alberta, and northeastern British Columbia.