BUENOS AIRES, ARGENTINA--(Marketwire - Aug. 10, 2012) -
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Estrella International Energy Services Ltd. (the "Company" or "Estrella") (TSX VENTURE:EEN), is pleased to announce that it has completed its previously announced CAD$25,000,000 private placement (the "Private Placement") with Ringo Holding L.P., a limited partnership of which Southern Cross Latin America Private Equity Fund IV, L.P. is the sole general partner (the "Purchaser").
With the closing of the Private Placement the Purchaser has become a new control person of the Company and its single largest shareholder; holding approximately 55.7% of the issued and outstanding common shares of the Company. The shareholders of the Company approved the Private Placement and the creation of a new control person at the Company's annual general and special meeting of shareholders held on June 25, 2012.
The Private Placement was completed pursuant to an investment agreement dated June 26, 2012 (the "Investment Agreement"). Pursuant to the Investment Agreement, the Purchaser purchased 166,666,667 units ("Units") of the Company at a price of CAD$0.15 per Unit. Each Unit is comprised of 1 common share (a "Common Share") in the capital of the Company and 0.4 Common Share purchase warrants (each whole warrant a "Warrant"). Each Warrant will entitle the holder to purchase 1 Common Share at an exercise price of CAD$0.15 per share (the "Exercise Price") for a period of 18 months from the date of issuance. After six months from the date of issuance, if the 10 day weighted average market price of the Common Shares is greater than CAD$0.25, the exercise price of the warrants will be equal to the higher of CAD$0.15 or 90% of the current market price.
The Company expects to use part of the proceeds of the Private Placement to repay US$10,000,000 of outstanding indebtedness on its existing credit facility ("Credit Facility") with Credit Suisse AG (the "Lender"). The balance of the proceeds may be used to further reduce indebtedness and for working capital reserves to assist with new project start-ups in Latin America.
As part of Estrella's plan to repay US$10,000,000 of the Credit Facility, the Company entered into an amended credit agreement with the Lender which (i) modifies the existing credit agreement to reduce administrative fees; (ii) modifies the amortization schedule such that Estrella will repay the remaining indebtedness in seven quarterly instalments of US$2,000,000 beginning on May 31, 2014; and (iii) frees up certain collateral currently pledged under the credit agreement in an effort to reduce administrative costs. In addition, the 3,072,000 Common Share purchase warrants which were issued to the Lender in connection with the Credit Facility were returned to the Company for cancellation.
Canaccord Genuity Corp. ("Canaccord") acted as financial advisor to the Company in connection with the Private Placement, and was paid a success fee on closing.
About Southern Cross Group
Southern Cross is a value oriented private equity buyout firm focused on operational and strategic management. Southern Cross was created to make value-oriented, control investments in Latin American companies that have significant potential for improved performance and growth. Since its inception in 1998, Southern Cross has raised over $2.5 billion and has completed 25 investments in the region, including investments in oil & gas companies in the region. Southern Cross seeks to deliver superior returns by optimizing its companies' strategic direction and operating performance through the Principals' direct involvement with the management of each portfolio company. As a result of its extensive regional experience, Southern Cross is well-positioned to identify and capitalize on high quality investment opportunities in Latin America.
Warren Levy, CEO of Estrella commented, "We are very pleased to bring the transaction with Southern Cross to a successful conclusion. Their entry and the restructuring of the capital structure of the company are crucial foundations off which we can continue to build a successful regional energy services company."
Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information are often identified by terms such as "may", "should", "anticipate", "expects", "will", "intend" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to services anticipated use of proceeds of the Private Placement, the repayment of the Credit Facility and matters related thereto, the anticipated closing date of the Private Placement and timing for the annual and special meeting of shareholders of Estrella.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
Chairman & Chief Executive Officer
+54 (11) 5217-5250
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