CALGARY, ALBERTA--(Marketwired - June 13, 2013) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Niko Resources Ltd. ("Niko" or the "Company") (NKO.TO) is pleased to announce today that it has closed a private placement of US$63.5 million principal amount of 7% senior unsecured notes (the "Notes") to a group of institutional investors.
The Notes bear interest at 7.00% per annum, payable monthly, and will be repaid through twelve equal monthly principal payments commencing August 13, 2013. Principal and interest payments are payable in cash or, at the Company's option, in common shares of the Company. If the Company elects to make any portion of a payment in common shares of the Company, the number of shares to be issued will be determined by dividing the amount to be paid in stock by 94.5% of the lower of the volume weighted average price of the shares for the fifteen day period prior to the payment date and the volume weighted average price of the shares for the five day period prior to the payment date, subject to certain restrictions. The Notes are ranked equally with the Company's Cdn$115 million senior unsecured notes issued in December, 2012.
Niko estimates the net proceeds from the issue of the Notes will be approximately US$58.5 million, after deducting the initial purchasers' discount and the estimated related expenses payable by Niko. Under the terms of the Notes, the net proceeds can be used for general corporate purposes.
The current borrowing base of the Company's credit facility assumes that the pricing for gas sales from the D6 Block in India will remain unchanged at US$4.20/MMBtu for the life of the D6 gas fields. Upon closing of the private placement of the Notes, the amounts outstanding and the availability under the Company's credit facility have been reduced to US$80 million. The borrowing base of the facility will be re-determined by the syndicate banks on or before July 31, 2013 in connection with the completion of the Company's independent reserves evaluation and if the expected increase in pricing for gas sales from the D6 Block in India is approved prior to that date, the syndicate banks will use the new pricing in their re-determination of the borrowing base. Adjustment to the new borrowing base amount will occur on or before August 31, 2013.
The Company is continuing with its planned asset sales, farm-outs, and other arrangements, and intends to use proceeds from these transactions or issue common shares to repay the Notes.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Niko in the United States. The Notes described in this press release (and any common shares of Niko issued at the Company's option pursuant to the provisions of the Notes) have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state and may not be offered, sold or delivered in the United States absent an exemption from registration.
Certain statements in this press release constitute forward-looking information. Specifically, this press release contains forward looking information relating to the re-determination of the Company's borrowing base under the credit facility, anticipating changes to pricing for gas sales from the D6 Block in India, possible sources of additional funding and possible issuances of common shares to repay principal and interest payments that will be owing under the Notes. These forward looking statements are based on certain key expectations and assumptions of management, including anticipated future financial results and sources of funding. The reader is cautioned that the assumptions used in the preparation of such forward looking information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors and such variations may be material. Such factors include, but are not limited to: regulatory and government approvals; general economic, market and business conditions; industry capacity; competitive action by other companies; risks and uncertainties associated with the debt and equity capital markets and other sources of financing; and other factors, many of which are beyond our control. Niko makes no representation that the actual results achieved during the forecast period will be the same in whole or in part as those forecast.