Addax Petroleum announces private placement of convertible notes
Thursday May 10, 2:35 am ET
/NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA OR JAPAN/
Up to US$300 million due 2012
CALGARY, May 10 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum" or the "Corporation") (TSX:AXC - News), an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East, today announces its intention to privately place up to US$300 million in principal amount of Convertible Notes due in 2012 (the "Notes"). This amount includes an overallotment option (in respect of up to US$25 million in principal amount of Notes) that the Corporation has granted to Citigroup Global Markets Limited and UBS Limited, the joint lead underwriters of the offering, which option can be exercised until May 25th 2007.
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Commenting today, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "Addax Petroleum is in the high growth phase of our corporate evolution. We have significant, profitable investment projects within our current portfolio and, through our new business origination efforts, believe there to be a good flow of opportunities in our strategic geographic areas upon which to capitalize. This offering will help to fund this growth opportunity and introduce a new investor class to Addax Petroleum."
The Notes to be issued by the Corporation will be convertible into Common Shares of the Corporation and are expected to have an annual coupon in the range of 3.75 to 4.25 per cent and an initial conversion premium of 35 to 40 per cent. The final coupon and conversion premium will be determined at pricing which is expected to occur later today. The Notes will be issued at 100 per cent of their principal amount and, unless previously redeemed, converted, or purchased and cancelled, will mature in 2012. In that regard, the Notes will be redeemable commencing slightly more than 3 years from the date of issue upon the occurrence of certain defined events.
The Notes will include a Net Share Settlement option, allowing the Corporation to settle investor conversions by repaying the par value of the Notes in cash, and delivering only the difference between the value of the underlying shares and the par value in shares. In doing so, Addax Petroleum retains the option to reduce the potential dilutive effect of the Convertible Notes instrument.
The net proceeds of the issue will be used for the Corporation's general corporate purposes.
The Notes are expected to be issued on or around May 30th, 2007. An application will be made for the Notes to be admitted to listing and to trading on the Professional Securities Market of the London Stock Exchange. The Corporation's Common Shares are listed and traded on the Toronto Stock Exchange (the "TSX").
There will be no public offering of the Notes which will be offered solely on a private placement basis in denominations of US$200,000. The issuance of the Notes is subject to regulatory approval including by the TSX.
About Addax Petroleum
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa having increased its crude oil production from an average of 8,800 bbl/d for 1998 to an average of approximately 116,000 bbl/d for the first quarter of 2007.
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