Bad news. Company update assessment: bankrupsy.
At best, mighty close! See today's update:
"Gale Force Petroleum announces status update on progress of restructuring, refinancing
MONTREAL, Jun 3, 2009 (Canada NewsWire via COMTEX) -- (Canada NewsWire)
Gale Force Petroleum Inc. (TSX Venture: GFP, the "Corporation") today announced a status update to shareholders regarding the progress of its debt restructuring and equity re-financing efforts.
The Corporation remains under bankruptcy protection as part of the Proposal to Creditors filed on February 4, 2009, under the Bankruptcy and Insolvency Act (Canada). Since the Proposal to Creditors was approved by the creditors and sanctioned by the Superior Court of Quebec, the Trustee is now soliciting unsecured creditors to provide their Proof of Claim until June 12, 2009, after which the unsecured creditors will be issued up to 45 million new common shares of the Corporation as a final dividend to settle their debts. Barring any unforeseen complications, this can be expected to occur prior to the end of June, 2009.
The Corporation is currently insolvent, but has sufficient resources to continue operations for a limited period of time while under the protection of the Proposal to Creditors. The Corporation is focusing its efforts on obtaining new equity financing, which is needed for working capital and to maintain the value of its assets.
Following the completion of the Proposal to Creditors, the Corporation will still hold a $2 million secured loan. This secured loan remains a major barrier for the Corporation in its efforts to obtain any new equity or other alternative financing. Therefore, the Corporation is currently negotiating with its secured lender, Primatlantis Capital L.P., to restructure the loan and convert a portion of the loan into equity, which would be subject to concurrently raising sufficient additional equity financing to provide a viable future for the Corporation.
The debt conversion and new equity financing transactions would be highly dilutive to all existing shareholders, including the new shareholders who are receiving payment in shares as part of the Proposal to Creditors. If the Corporation is able to convert part of its secured loan and obtain sufficient new equity financing, it would be expected to issue approximately 400 million new shares as part of these transactions. However, given the current financial situation of the Corporation and capital market conditions, such transactions appear to be the Corporation's sole viable alternative.
If the Corporation is unable to negotiate a conversion of its secured loan into equity and obtain new equity financing, it will not be able to continue as a going concern and will possibly be required to file for bankruptcy in the coming months. Further details will be announced in such circumstances.
ABOUT GALE FORCE PETROLEUM INC.(TM) - www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and exploiting unconventional and conventional gas resources in mature basins, building shareholder value through growth. It owns producing natural gas properties in Alberta, Canada and in Kentucky, USA.
Forward looking statements:
Statements included herein, including those that express management's expectations or estimates of our future performance, constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements - especially but not limited to any geological or reservoir information not supported by a NI 51-101 report - are based on assumptions and estimates that are subject to various risks and uncertainties including but not limited to geological risk, engineering risks, market risk and the risks disclosed under the heading "Business Risks" in the Corporation's periodic filings with Canadian securities regulators, including most recently in its Management Discussion and Analysis for the annual exercise ended June 30, 2008 available on SEDAR. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Corporation does not assume the obligation to update any forward-looking statements.
"The TSX Venture Exchange has not reviewed this release and therefore
does not accept responsibility for its adequacy or accuracy."
SOURCE: Gale Force Petroleum Inc.
Michael McLellan, Chairman and CEO, (514) 333-9292
Copyright (C) 2009 CNW Group. All rights reserved."
Any wonder that volume at .01. IMO, time to take the loss and move on.
g.p.
