Monday, 30 April 2012

Transeuro Energy to issue NOK60-90 mln in convertible bonds

Transeuro Energy Corp. (CVE:TSU) said Monday it is proceeding with the issue of a NOK60-90 million senior secured convertible bond with maturity in May 2015.

The company is currently negotiating a second funding facility of approximately C$20 million. The second financing is expected to be formally approved within one week, it said.

The main terms of the secured convertible bond are an annual interest rate at 12 percent and a conversion price at NOK0.85.

Transeuro said the minimum convertible bond size of NOK60 million has already been subscribed for by a limited number of investors, and the company has extended the subscription period to May 2 to allow other interested parties the opportunity to participate.

The received subscriptions for the contemplated convertible bond financing are subject to another financing facility currently being negotiated with one other financial institution for approximately C$20 million.

Transeuro said that the proceeds are for general corporate purposes and to ensure the company can develop up to seven of its existing wells through to production over the next 12 months, including three wells in Ukraine and up to four wells in Canada.

The company said that planned activities include rig work-overs, hydraulic fracturing, acidizing and the installation of the necessary production facilities and flow lines. The target is to increase production rates and sales revenues and to reduce the break-even production cost in Canada.

Transeuro said that following success, the company would anticipate the transfer of some discovered and contingent resources into reserves.

Fondsfinans ASA has been appointed as sole manager of the contemplated secured convertible bond issue.

Calgary-based Transeuro has a gas producing property in British Columbia, and also has an interest in gas exploration and appraisal developments in Crimea, Ukraine.

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