Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Frontera Resources (FRR)

  Print      Mail a friend

Tuesday 13 April, 2010

Frontera Resources

Exchange Offer

RNS Number : 1193K
Frontera Resources Corporation
13 April 2010
 



 

FRONTERA RESOURCES CORPORATION

 

 

Houston, Texas, U.S.A. - 13 April 2010

 

 

FRONTERA RESOURCES ANNOUNCES

EXCHANGE OFFER FOR RESTRUCTURING OF CONVERTIBLE DEBT AND WARRANTS

 

Frontera Resources Corporation (London Stock Exchange, AIM Market: FRR; OTCQX Market, U.S.A.: FRTE), an independent oil and gas exploration and production company ("Frontera" or the "Company"), today announced that, further to the announcement of 19 November 2009, regarding the analysis of possible options related to the restructuring of the Company's long-term debt, the Company has initiated a restructuring plan involving an exchange offer for its convertible notes and certain outstanding warrants. 

 

Highlights

 

The key elements of the proposed restructuring are as follows:

 

·      the Company is offering to exchange existing long-term convertible notes for new convertible notes with a longer maturity, shares of common stock or a combination of both, in order to restructure and reduce and/or extend the term of the Company's existing debt; and

 

·      the Company is offering to exchange certain existing warrants for new warrants with more favorable economic terms, in order to incentivise the holders to exercise such warrants to fund ongoing working capital requirements of the Company.

 

Frontera believes that this restructuring, if completed, will provide the Company with a more appropriate balance sheet for its current stage of exploration and production activity, commensurate with its strategy of increasing near-term production from its Shallow Fields Production Unit, while pursuing farmout and/or strategic partnership arrangements for its higher resource potential assets, such as the Basin Edge Play Unit.   It should be noted, however, there can be no assurance that the holders of existing notes will tender any such notes for new notes or common stock or that any warrant holders will exchange or exercise their warrants under the new terms.

 

The Exchange Offer

 

As a key element of its restructuring plan, Frontera has commenced an offer (the "Exchange Offer") to purchase any or all of its existing 10% convertible notes due in May 2012 (the "2012 Notes") and its existing 10% convertible notes due in July 2013 (the "2013 Notes") (together with the 2012 Notes, the "Old Notes"), in consideration for, at the option of each tendering holder, either:

 

·      4,336.33shares of common stock, of par value US$.00004 each, in the Company (the "Common Stock") for each US$1,000 principal amount of Old Notes tendered for exchange (equivalent to a conversion price of £0.15 per Common Stock) (the "Stock Payment"); or

 

·      US$1,000 principal amount of new 10% convertible notes due in 2015 (the "New Notes") for each US$1,000 principal amount of Old Notes tendered (the "New Notes Payment"); or

 

·      a combination of the Stock Payment and the New Notes Payment.

 

There is currently outstanding an aggregate principal amount of US$106,737,289 of Old Notes as of 31 March 2010 as follows:

 

·      US$78,818,314 of the 2012 Notes, convertible into Common Stock at the rate of 598.80 shares (equivalent to a conversion price of US$1.67 per share) for each US$1,000 in principal amount; and

 

·      US$27,918,975 of the 2013 Notes, convertible into Common Stock at the rate of 584.80 shares (equivalent to a conversion price of US$1.71 per share) for each US$1,000 in principal amount. 

 

Terms of New Notes

 

The terms of the New Notes will be substantially similar to the terms of the Old Notes, except that:  

 

·      the New Notes will be senior to the Old Notes;

 

·      the New Notes will have a maturity date of 30 June 2015; and

 

·      the New Notes will be convertible into Common Stock at the rate of 833.33 shares (equivalent to a conversion price of US$1.20 per share) for each US$1,000 in principal amount.   

 

Condition to Stock Payment

 

Payment of the Stock Payment is conditional upon holders of 70% of the aggregate principal amount of the Old Notes electing to receive the Stock Payment.  If the holders of less than 70% of the aggregate principal amount of the Old Notes elect to receive the Stock Payment, then such holders who have elected to receive the Stock Payment will instead receive the New Notes Payment.  Although issuance of the New Notes Payment in lieu of the Stock Payment will not reduce the quantum of Frontera's indebtedness, it will extend the repayment terms in comparison to the Old Notes, which the Company believes will provide an increased level of flexibility in respect of the future management of its debt position.

 

Other Terms

 

Holders of Old Notes that tender any notes in the Exchange Offer will also receive accrued and unpaid interest for such notes from the last interest payment date to, but not including, the settlement date of the Exchange Offer, in the same form as their election in the Exchange Offer.

 

Holders of Old Notes that tender less than all of their notes must do so in denominations of US$1,000.  Holders of Old Notes that tender notes for the Stock Payment will receive shares of Common Stock at the exchange rate rounded up to the nearest whole share for that portion of their tendered notes having a denomination less than US1,000.

 

 

 

Consents

 

In conjunction with the Exchange Offer, the Company is also soliciting consents from:

 

·      the Company's stockholders to amend the Company's certificate of incorporation to increase its authorized Common Stock to 800 million shares; and

 

·      the holders of the Old Notes to amend certain terms of the note purchase agreements governing the Old Notes to allow the Exchange Offer and to remove most of the restrictive covenants. 

 

The Exchange Offer is conditional upon the satisfactory resolution of the above consents.

 

Timetable

 

The Exchange Offer commenced on 13 April 2010 and will expire at 5:00 p.m., Houston time, on 11 May 2010, unless extended or earlier terminated by the Company (the "Expiration Date").  The settlement date is expected to be the fifth business day following the Expiration Date.  The Company may extend the Expiration Date for the Exchange Offer, and any extension will be publically announced as promptly as practicable.  Old Notes that have been validly tendered may be withdrawn any time before, but not after, the Expiration Date. 

 

Reasons for the Exchange Offer

 

As mentioned above, the purpose of the Exchange Offer is to increase the Company's operating and financial flexibility by reducing outstanding debt and the related interest expense and/or to extend the maturity of the Company's long-term debt.  The Company believes the current level of long-term debt and proximity to maturity adversely affects its ability to access new capital essential for executing the Company's work programs and to satisfy its ongoing working capital requirements. Frontera believes that restructuring and decreasing its existing debt would likely increase its ability to access new capital, the raising of which would enable the Company to continue its desired work program to increase oil and gas production levels, although there can be no assurance any such prospective capital raise or work program will be successful.

 

The Company has also today announced its final results for the year ended 31 December 2009, which included an explanatory paragraph in its report of independent auditors regarding the Company's ability to continue as a going concern, the full detail of which can be found in a separate Frontera announcement made simultaneously with this announcement or on the Company's website at www.fronteraresources.com.  The Company believes that the proposed restructuring will better position the Company to address the current situation in respect of its financial position. 

 

An offer to purchase, related letters of transmittal and other exchange materials are being distributed to holders of the Old Notes today, in which the terms of the Exchange Offer and consent solicitations are described in full. The offer to purchase and letters of transmittal contain detailed procedures for tendering and withdrawing the Old Notes, the manner in which such securities will be accepted by the Company for payment, risk factors and a discussion of certain United States federal income tax considerations of the Exchange Offer.  Holders of the Old Notes are highly encouraged to carefully read the offer to purchase and related materials, as they contain important information that holders of Old Notes should consider before making any decision with respect to the Exchange Offer.

 

Additional copies of the offer to purchase, related letters of transmittal and other exchange materials governing the Exchange Offer may be obtained at the Company's expense by contacting Liz Williamson, Vice President, Investor Relations and Corporate Communications, by telephone at (713) 585-3216 or by e-mail at lwilliamson@fronteraresources.com.  Computershare Trust Company, N.A., the depositary and exchange agent for the Exchange Offer, may be contacted by telephone at (781) 575-4154, by fax at (781) 575-2420, or by overnight mail or courier at 250 Royall Street, Canton, MA 02021.

 

Warrant Offer

 

On 18 September 2009, the Company completed a placement of shares of Common Stock and warrants to purchase shares of Common Stock (the "Placement").  In connection with the Placement, the Company issued 45,186,536 two-year warrants and 1,355,596 eighteen-month warrants to purchase shares of Common Stock at a price of £0.15 per share (each a "Placement Warrant"). 

Concurrently with the Exchange Offer detailed above, the Company will offer to each holder of the 46,542,132 Placement Warrants the opportunity to exchange such warrants for new warrants (the "New Warrants"), exercisable at a price of £0.076 (US$0.117) per share, which is 90% of the average closing market price on AIM for the 20 trading days preceding the date of the Exchange Offer (the "Warrant Offer").  The closing price for a share of Common Stock on 12 April 2010 was £0.084.  The Warrant Offer will expire on the Expiration Date. 

 

If all holders of Placement Warrants elect to exchange such warrants for New Warrants, the number of shares of Common Stock issuable on exercise of the New Warrants will be increased to 91,859,471, which is in the same proportion to the ratio of the original exercise price to the new exercise price.  In consideration for the New Warrants, the warrant holders will relinquish the right of cashless exercise contained in the Placement Warrants.  Otherwise, the terms of the New Warrants will be substantially the same as the terms of the Placement Warrants.

 

Holders of the Placement Warrants that elect to exchange their warrants pursuant to the Warrant Offer will be required to make such election on or before the Expiration Date.  The Warrant Offer is conditional upon holders of at least 70% of the aggregate principal amount of the Old Notes having elected to receive the Stock Payment by the Expiration Date.

 

If all of the Placement Warrants are exchanged for New Warrants in the Warrant Offer, and all such New Warrants are exercised, the Company will issue 91,859,471 new shares of Common Stock and receive gross proceeds of approximately £7.0 million (US$10.7 million) in connection therewith.  However, there is no requirement to exercise the Placement Warrants exchanged in the Warrant Offer, and there can be no assurance that any Placement Warrants will be exchanged or that any New Warrants will be exercised.

 

2008 Warrants

 

In addition to the above, the Company's outstanding warrants issued in 2008 and currently exercisable for, in aggregate, 6,527,838 shares of Common Stock at an exercise price of US$1.69 per share of Common Stock (the "2008 Warrants"), will be adjusted in accordance with their terms following completion of both the Exchange Offer and the Warrant Offer.  If holders of 100% of the aggregate principal amount of the Old Notes elect to receive the Stock Payment, the 2008 Warrants will be adjusted to, in aggregate, approximately 19,900,000 shares of Common Stock at an exercise price of US$0.55 per share.  If holders of 100% of the Placement Warrants elect to receive New Warrants in connection with the Warrant Offer, in addition to the foregoing adjustment, the 2008 Warrants will be further adjusted to, in aggregate, approximately 22,500,000 shares of Common Stock at an exercise price of US$0.49 per share.

 

Related Party Transactions

 

As (i) Spyros Karnessis and Stephen E. McGregor, being members of Frontera's Board of Directors (the "Board"), are indirect holders of US$12,980,672 principal amount of Old Notes in aggregate; and (ii) Messrs. Karnessis and McGregor, Steve C. Nicandros and Lan Bentsen, being members of the Board, are direct or indirect holders of 38,853,855 Placement Warrants in aggregate, both the Exchange Offer and the Warrant Offer are classified as related party transactions in accordance with the AIM Rules for Companies (the "AIM Rules").  Accordingly, the independent directors, being Luis Giusti and Andrew Szescila, having consulted with Strand Hanson Limited, the Company's nominated adviser, consider the terms of the Exchange Offer and the Warrant Offer to be fair and reasonable insofar as the Company's stockholders are concerned.  In providing its advice, Strand Hanson Limited has taken into account the independent directors' commercial assessments.

 

Directors Holdings

 

The directors holding Old Notes have advised the Company they intend to elect the Stock Payment in exchange for all of their Old Notes, and the directors holding Placement Warrants have advised the Company they intend to exchange all of their Placement Warrants for New Warrants. 

 

Directors of Frontera who are classified as related parties in the Exchange Offer or the Warrant Offer in accordance with the AIM Rules have the following direct or indirect holdings of Frontera securities:

 


Steve C. Nicandros

Lan Bentsen

Spyros N. Karnessis

Stephen E. McGregor

Current Holdings

Common Stock

8,688,672

2,705,885

40,656,490

1,481,959

Placement Warrants

3,565,675

594,279

34,107,058

586,843

2008 Warrants

-

-

488,587

48,859

Old Notes

-

-

US$12,340,630.12

US$640,042.27

Holdings Following the Exchange Offer and the Warrant Offer(1)

Common Stock

8,688,672

2,705,885

94,169,478

4,257,391

New Warrants

7,037,516

1,172,919

67,316,562

1,158,243

2008 Warrants

-

-

1,685,126

168,514

______________________________________

1Assuming the directors exchange all of their Old Notes for the Stock Payment and all of their Placement Warrants for New Warrants.

 

Further Notice

 

The Exchange Offer and the Warrant Offer are each being made in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 3(a)(9) of the Securities Act.  This press release is neither an offer to purchase or exchange, nor a solicitation to buy or exchange, any of the Old Notes or the Placement Warrants, nor is it a solicitation for acceptance of the Exchange Offer or the Warrant Offer.  The Exchange Offer and consent solicitations are being made only pursuant to the offer to purchase, letters of transmittal and other exchange materials being distributed to the holders of the Old Notes, and the Warrant Offer is being made only pursuant to the Warrant Offer documents being distributed to holders of the Placement Warrants.  Neither the Exchange Offer nor the Warrant Offer is being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.  None of the Company or its affiliates, or Computershare Trust Company, N.A., the depositary and exchange agent for the Exchange Offer, is making any recommendation with regard to the merits of the Exchange Offer or the Warrant Offer.

 

 

Enquiries:

 

Frontera Resources Corporation

Liz Williamson

Vice President, Investor Relations and Corporate Communications

(713) 585-3216

lwilliamson@fronteraresources.com

 

Nominated Adviser:

 

Strand Hanson Limited

James Harris / Paul Cocker / Liam Buswell

+44 (0)20 7409 3494

 

Broker:

 

Arbuthnot Securities Limited

Andrew Fairclough / Henry Willcocks

+44 (0)20 7012 2000

 

Notes to editors:

 

1. Frontera Resources Corporation is an independent Houston, Texas, U.S.A.-based international oil and gas exploration and production company whose strategy is to identify opportunities and operate in emerging markets around the world. Frontera has operated in Georgia since 1997, where it holds a 100% working interest in a production sharing agreement with the government of Georgia. This grants Frontera the exclusive right to explore for, develop and produce oil and gas from a 5,060 square kilometer area in eastern Georgia known as Block 12. Frontera's common stock is traded on the London Stock Exchange, AIM Market - Symbol: FRR, and via the Pink OTC Markets OTCQX Market Tier - Symbol: FRTE. For more information, please visit www.fronteraresources.com.

 

2. This release and the information referred to herein may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the potential restructuring and other transactions and matters discussed in this release. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: fluctuations in oil and gas prices; general economic conditions; conditions in the global financial markets; the political situation in Georgia and relations with neighboring countries; and other factors listed in Frontera's financial reports, which are available at www.fronteraresources.com/Investors.php?link_id=23, and in the offer to purchase and related materials, which are available from the Company as outlined above. There is no assurance that Frontera's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCKKNDBNBKDCQD