HOUSTON, TEXAS–(Marketwired – Sept. 9, 2016) – Greenfields Petroleum Corporation (the “Company” or “Greenfields“) (TSX VENTURE:GNF) is pleased to announce that the Company has completed the previously announced corporate restructuring transactions, including the restructuring of the Company’s senior loan with Vitol Energy (Bermuda) Ltd. (“Vitol“) and the early settlement of the loan with Heaney Asset Corp. (“Heaney“), each on the terms as set forth in the management information circular (the “Circular“) of the Company dated July 18, 2016. In addition, the Company is pleased to announce that it has secured USD$3,025,000 of additional funding by way of loans to improve Greenfields’ financial liquidity and sustainability.
On September 9, 2016, Greenfields completed the restructuring of its senior loan (the “Loan Restructuring“). As disclosed in the Circular, Greenfields entered into a series of amendments to its loan agreement with Vitol pursuant to which the loan maturity date was extended from December 31, 2015 to March 31, 2018, and the interest rate was reduced to 12% per annum. In consideration for agreeing to the Loan Restructuring, on September 9, 2016, the Company issued: (i) to Vitol, 75,404,975 common shares in the capital of the Company (“Common Shares“) and 75,404,975 Common Share purchase warrants (“Warrants“); and (ii) to Ingalls & Snyder LLC (“I&S“), a lender under the loan with Vitol, 10,574,942 Common Shares and 10,574,942 Warrants.
The Warrants have the following terms: (i) each Warrant shall entitle the holder thereof to purchase a Common Share at an exercise price of $0.375 per Common Share; (ii) Warrants will only vest in the event of a dilutive issuance of securities by Greenfields and only as to such number of Warrants as are necessary to maintain each of the holder’s equity position in Greenfields; (iii) all rights to unvested Warrants will terminate upon the earlier of: (A) the maturity date under the Loan Agreement, being March 31, 2018; and (B) the date on which all amounts owing under the loan with Vitol are repaid in full; and (iv) all vested Warrants may be exercised at any time, and from time to time, for a period of five years from the date of their issuance.
On August 18, 2016, shareholders of the Company approved the issuance of the Common Shares and Warrants to Vitol and I&S. In addition, on August 18, 2016, the debentureholders of the Company (the “Debentureholders“) approved the extraordinary resolution providing for the 9.00% convertible unsecured subordinated debentures of the Company due May 31, 2017 (the “Debentures“) to be compromised and extinguished in satisfaction of all claims of the Debentureholders in exchange for Common Shares (the “Debentureholders’ Resolution“). Following the approval of the Debentureholders’ Resolution, on August 26, 2016, 33,143,825 Common Shares (approximately 1,397 Common Shares for every CDN$1,000 of principal amount of Debentures, including all accrued and unpaid interest payable thereon) were issued to the Debentureholders (the “Debenture Conversion“).
Following the completion of the Loan Restructuring, the Debenture Conversion, the Heaney Settlement (as described below) and the Additional Loan Funding (as described below), Vitol directly or indirectly holds 77,014,802 Common Shares, which constitutes approximately 49.1% of the issued and outstanding Common Shares.
Loan Settlement Agreement
Further to the press release of the Company dated April 12, 2016 and as disclosed in the Circular, Greenfields has completed its obligations under the early settlement agreement (the “Loan Settlement Agreement“) dated April 12, 2016 with Heaney (the “Heaney Settlement“). Pursuant to the Heaney Settlement, on September 9, 2016, Greenfields issued 11,500,000 Common Shares to Heaney in settlement of all amounts outstanding under the subordinated revolving loan agreement dated June 27, 2014 between Greenfields and Heaney, which amounts included principal in the amount of $20,834,705 and accrued interest. In addition, Greenfields has issued 500,000 Common Shares to an agent as partial consideration for a success fee in negotiating the Loan Settlement Agreement.
Additional Loan Funding
As part of the overall restructuring plan of Greenfields, the Company has secured additional funding of USD$3,025,000, through loan agreements (“Additional Loan Agreements“) dated effective September 9, 2016 with a consortium of lenders, which includes insiders of the Company (the “Additional Loan Funding“). The loans have a maturity date of March 31, 2018, and bear interest at a rate of 12% per annum. Pursuant to the terms of the Additional Loan Agreements, the lenders have received 1.2 Common Shares for each USD$1.00 of principal loaned to the Company. Proceeds from the Additional Loan Funding will be used, among other things, to settle the fees related to the Loan Settlement Agreement and other restructuring transaction costs, and to fund the Bahar Gas Field recompletion program. Certain insiders provided $550,000 of the Additional Loan Funding and, as consideration for such Additional Loan Funding, the insiders received an aggregate of 660,000 Common Shares. Certain of the loans with non-insiders were subject to a commitment fee of 4.5% of the loan amounts, resulting in a commitment fee paid by Greenfields in the aggregate amount of $61,875.
Following the completion of the Loan Restructuring, the Debenture Conversion, the Heaney Settlement and the Additional Loan Funding, the Company has 156,859,180 Common Shares issued and outstanding. All Common Shares issued pursuant to the Loan Restructuring Transaction, the Heaney Settlement and the Additional Loan Funding are subject to a standard four month hold period from the date of issue.
About Greenfields Petroleum Corporation
Greenfields is a junior oil and natural gas company focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins, and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as “greenfields”. More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.