Oando Energy Resources reduces debt by US98-million

Oando Energy Resources reduces debt by US98-million

Oando Energy Resources Inc. (“Oando Energy Resources” or the “Company“) (TSX:OER), a company focused on oil and gas exploration and production in Nigeria, is pleased to announce the conversion to equity of principal and interest in the amount of US$ 98 million, outstanding under the US$ 1.2 billion facility agreement dated 10 February, 2014with Oando Plc (the “Oando Loan“) (the “Conversion“). US$ 41 million of principal remains outstanding under the Oando Loan and an aggregate principal amount of approximately US$ 292 million remains available to be drawn under the Oando Loan.
OER has issued 68,144,115 units (the “Units”) to Oando Resources Limited (“Oando Resources”), a subsidiary of Oando Plc, as repayment of amounts outstanding under the Oando Loan at a conversion price of C$1.57 per Unit. Each Unit consists of one common share of the Company (a “Common Share”) and one-half of one warrant to purchase an additional Common Share at a price of CAD$ 2.00 per Common Share (each whole common share purchase warrant being a “Warrant”) up until 30 July 2016, a 24 month period from which the Company closed the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips. The terms of the Units, other than the denomination of the conversion price and exercise price in United States dollars, have the same terms as the Units issued to third party investors and Oando Resources on previous tranches.
Prior to the completion of the Conversion, Oando Plc owned, and exercised control or direction over, 677,963,723 Common Shares, representing approximately 93.2% of the issued and outstanding Common Shares. As a result of the Conversion, Oando Plc currently beneficially owns, or exercises control or direction over, 746,107,838 Common Shares, representing approximately 93.8% of the issued and outstanding Common Shares. Assuming exercise of the Warrants and warrants previously issued to Oando Plc on previous tranches of the loan, Oando Plc would beneficially own, or exercise control or direction over, 1,071,500,708 Common Shares, representing approximately 95.6% of the Company’s 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%.
Amounts owing under the Oando Loan in the future may be converted into Units at one or more prices to be determined in accordance with the pricing mechanism described in OER’s press release dated February 10, 2014.
Source: Oando Plc
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