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EEN

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Share Name Share Symbol Market Type
TSXV:EEN TSX Venture Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0 -

Estrella Completes CAD$25,000,000 Private Placement

10/08/2012 4:40pm

Marketwired Canada


THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.


Estrella International Energy Services Ltd. (the "Company" or "Estrella") (TSX
VENTURE:EEN), is pleased to announce that it has completed its previously
announced CAD$25,000,000 private placement (the "Private Placement") with Ringo
Holding L.P., a limited partnership of which Southern Cross Latin America
Private Equity Fund IV, L.P. is the sole general partner (the "Purchaser").  


With the closing of the Private Placement the Purchaser has become a new control
person of the Company and its single largest shareholder; holding approximately
55.7% of the issued and outstanding common shares of the Company. The
shareholders of the Company approved the Private Placement and the creation of a
new control person at the Company's annual general and special meeting of
shareholders held on June 25, 2012. 


The Private Placement was completed pursuant to an investment agreement dated
June 26, 2012 (the "Investment Agreement"). Pursuant to the Investment
Agreement, the Purchaser purchased 166,666,667 units ("Units") of the Company at
a price of CAD$0.15 per Unit. Each Unit is comprised of 1 common share (a
"Common Share") in the capital of the Company and 0.4 Common Share purchase
warrants (each whole warrant a "Warrant"). Each Warrant will entitle the holder
to purchase 1 Common Share at an exercise price of CAD$0.15 per share (the
"Exercise Price") for a period of 18 months from the date of issuance. After six
months from the date of issuance, if the 10 day weighted average market price of
the Common Shares is greater than CAD$0.25, the exercise price of the warrants
will be equal to the higher of CAD$0.15 or 90% of the current market price. 


The Company expects to use part of the proceeds of the Private Placement to
repay US$10,000,000 of outstanding indebtedness on its existing credit facility
("Credit Facility") with Credit Suisse AG (the "Lender"). The balance of the
proceeds may be used to further reduce indebtedness and for working capital
reserves to assist with new project start-ups in Latin America. 


As part of Estrella's plan to repay US$10,000,000 of the Credit Facility, the
Company entered into an amended credit agreement with the Lender which (i)
modifies the existing credit agreement to reduce administrative fees; (ii)
modifies the amortization schedule such that Estrella will repay the remaining
indebtedness in seven quarterly instalments of US$2,000,000 beginning on May 31,
2014; and (iii) frees up certain collateral currently pledged under the credit
agreement in an effort to reduce administrative costs. In addition, the
3,072,000 Common Share purchase warrants which were issued to the Lender in
connection with the Credit Facility were returned to the Company for
cancellation.  


Canaccord Genuity Corp. ("Canaccord") acted as financial advisor to the Company
in connection with the Private Placement, and was paid a success fee on closing.


About Southern Cross Group 

Southern Cross is a value oriented private equity buyout firm focused on
operational and strategic management. Southern Cross was created to make
value-oriented, control investments in Latin American companies that have
significant potential for improved performance and growth. Since its inception
in 1998, Southern Cross has raised over $2.5 billion and has completed 25
investments in the region, including investments in oil & gas companies in the
region. Southern Cross seeks to deliver superior returns by optimizing its
companies' strategic direction and operating performance through the Principals'
direct involvement with the management of each portfolio company. As a result of
its extensive regional experience, Southern Cross is well-positioned to identify
and capitalize on high quality investment opportunities in Latin America. 


Warren Levy, CEO of Estrella commented, "We are very pleased to bring the
transaction with Southern Cross to a successful conclusion. Their entry and the
restructuring of the capital structure of the company are crucial foundations
off which we can continue to build a successful regional energy services
company." 


Statements in this press release may contain forward-looking information. Any
statements in this press release that are not statements of historical fact may
be deemed to be forward-looking information. Forward-looking information are
often identified by terms such as "may", "should", "anticipate", "expects",
"will", "intend" and similar expressions. Forward-looking statements in this
press release include, but are not limited to, statements with respect to
services anticipated use of proceeds of the Private Placement, the repayment of
the Credit Facility and matters related thereto, the anticipated closing date of
the Private Placement and timing for the annual and special meeting of
shareholders of Estrella. 


The reader is cautioned that assumptions used in the preparation of any
forward-looking information may prove to be incorrect. Events or circumstances,
such as future availability of capital on favourable terms, may cause actual
results to differ materially from those predicted, as a result of numerous known
and unknown risks, uncertainties, and other factors, many of which are beyond
the control of Estrella. The reader is cautioned not to place undue reliance on
any forward-looking information. Such information, although considered
reasonable by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated. Forward-looking
statements contained in this press release are expressly qualified by this
cautionary statement. The forward-looking statements contained in this press
release are made as of the date of this press release, and Estrella does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by securities law.


THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES,
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL
ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES
HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT
THEREFROM.


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