CALGARY, ALBERTA -- (Marketwire) -- 12/14/12 -- MENA Hydrocarbons Inc. ("MENA" or the "Company") (TSX VENTURE: MNH) announced today that it is proceeding with a non-brokered private placement (the "Offering") of up to 25,000,000 million units at a price of $0.02 per unit for gross proceeds of $500,000. Each Unit will consist of one common share and one-half of one share purchase warrant. Each whole warrant is exercisable at a price of $0.05 at any time within 12 months from the date of issue, and at a price of $0.10 thereafter until two years from date of issue. The Offering is being made pursuant to the Bulletin of the TSX Venture Exchange ("TSXV") dated August 17, 2012 which provides for temporary relief from certain pricing requirements. Mr. Magdy Bassaly is expected to subscribe for 25% of the Offering ($125,000 or 6,250,000 units) with the balance of the Offering to be subscribed for by arm's length third parties.
The net proceeds of the financing will be used to fund the maintenance and development of the Company's assets in Egypt, to repay amounts owing to arm's length third party creditors in Egypt and Canada and for working capital purposes. The Offering is necessary to support existing operations, activities and assets, and none of the proceeds will be used to fund the purchase or pursuit of new businesses, operations or activities, or to compensate, settle indebtedness with, or otherwise satisfy obligations to, any person who is a Related Party (as such term is defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual).
Mr. Bassaly's participation in the Offering is considered a related party transaction for the purposes of TSXV Policy 5.9 which incorporates the requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Mr. Bassaly's participation in the Offering is exempt from the valuation and minority approval requirements of MI 61-101 due to, amongst other available exemptions, the financial hardship exemptions set out in sections 5.5(g) and 5.7(1)(e) of MI 61-101. A committee of independent directors of the Company reviewed Mr. Bassaly's participation in the Offering and determined that MENA is in serious financial difficulty, Mr. Bassaly's participation in the Offering is designed to improve the financial position of MENA, and the terms of the Offering related to his participation are reasonable in the circumstances of MENA. Accordingly, the Offering is exempt from minority shareholder approval and formal valuation requirements of M1 61-101.
Proceeding with the Offering is subject to the approval of the TSXV.
About MENA Hydrocarbons
MENA Hydrocarbons is an international oil and gas company focused on growing an asset base of production, development and high impact exploration in the Middle East and North Africa region. In Egypt, MENA owns and operates the development lease for the Lagia oil field, a 32 square kilometre onshore block located on the Sinai Peninsula, directly adjacent to the Gulf of Suez. In Syria, MENA owns a 30% participating interest in Block 9 in Syria, a 10,032 square kilometre onshore block prospective for crude oil, natural gas and condensate. In the United States, MENA owns 6,242 gross acres (with an 81.2% average working interest) in Northwestern Montana with light/medium oil reserves. MENA's shares currently trade on the TSX Venture Exchange under the symbol "MNH".
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