News Column

Petrominerales Provides Notice of Bondholder Meeting

Jun 20 2013 12:00AM

Marketwire

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CALGARY, ALBERTA -- (Marketwired) -- 06/20/13 -- Petrominerales (TSX: PMG) (BVC: PMGC) announces that its indirect wholly-owned subsidiary Petrominerales Bermuda Ltd. (the "Company") intends to summon a Bondholder Meeting to restructure certain conditions in the outstanding 2.625% Convertible Bond ISIN NO 0010583990 (the "Bonds"). The Company intends to convene a meeting of the holders of the outstanding Bonds (the "Bondholders") to be held at the premises of Norsk Tillitsmann ASA, Haakan VIIs gt 1, 0161 Oslo, 5th Floor (the "Bondholders' Meeting"). A notice (the "Notice") is expected to be issued by the Company to Bondholders tomorrow to convene the Bondholders' Meeting.

Introduction

The Bonds were issued on August 25, 2010 pursuant to a loan agreement between the Company and Norsk Tillitsmann ASA, as bond trustee on behalf of the Bondholders, dated August 21, 2010 (the "Bond Agreement"). Pursuant to the Bond Agreement, the Bondholders, inter alia, have a onetime right to prepayment of its Bonds at 100 per cent of par value plus accrued interest on August 25, 2013 (the "Bondholders' Put Option"). The Company intends to convene the Bondholders' Meeting to introduce a motion to amend certain provisions of the Bond Agreement to provide for the extension of the Bondholder's Put Option by 6 months.

During the second quarter, Petrominerales repurchased and cancelled $50 million principal value of convertible bonds from certain offshore purchasers, and as a result, the remaining balance of convertible bonds is $144 million.

Purpose of Bondholder Meeting

The Company would like to extend the Bondholders' Put Option by six months until 25 February 2014 in order to maintain financial flexibility while adequately completing the previously announced sale of its pipeline assets in Colombia. We expect to complete our OCENSA equity sales process around the end of the third quarter. We have adjusted our sales process in order to evaluate participation with other OCENSA shareholders in a combined, larger OCENSA equity sales process in order to maximize value from these assets.

The Company proposes an amendment to the Bond Agreement that the Bonds, including accrued but unpaid interest, will fall due for prepayment in cash if and when the sale of the pipeline assets have been completed ("Mandatory Prepayment"). The Mandatory Prepayment date will be within 10 business days after completion of such sale (the "Mandatory Redemption Date").

If the proposed amendments are approved by the Bondholders' Meeting, Petrominerales will undertake, on behalf of itself and its group, not to buy back any of its outstanding shares in the period from the date of the summons to the Bondholders' Meeting until the earlier of (i) the Mandatory Redemption Date, and (ii) the extended Bondholders' Put Option date 25 February 2014.

Based on initial contact with major bondholders to-date, the Company has reached agreement with the holders of $60 million of the Bonds, representing 42% of the outstanding Bonds, on the proposed amendments to the Bond Agreement. In consideration for agreeing to the proposed changes to the Bond Agreement, the Company will offer a one-time up front coupon of 4.75% of the then outstanding Bonds payable to the Bondholders if the proposed amendments to the Bond Agreement are passed at the Bondholders' Meeting.

The Company anticipates that the proposed changes will be accepted by the Bondholders at the Bondholders' Meeting. In order to have a valid quorum, at least 50% of the outstanding Bonds must be represented at the Bondholders' Meeting. To approve the proposal above, Bondholders representing at least two thirds of the Bonds represented at the Bondholders' meeting must vote in favour of the resolution. If the proposal is not adopted, the Bond Agreement will remain unchanged.

However, if the motion is not passed at the Bondholders' Meeting, or the Bondholders' Meeting does not take place through a lack of quorum or for any other reason, the Company intends to satisfy its obligations under the Bondholders' Put Option in accordance with the terms of the Bond Agreement.

Petrominerales Ltd. is an international oil and gas company operating in Latin America since 2002. Our high-quality land base and multi-year inventory of exploration and development opportunities in Colombia, Peru and Brazil provide long-term growth potential for years to come.

Forward-Looking Statements and Cautionary Language. Certain information provided in this press release constitutes forward-looking information. Specifically, this press release contains forward-looking information relating to the calling of the Bondholders' Meeting and the Company's intention and ability to satisfy the Bondholders' Put Option in the event the amendments to the Bond Agreement are not approved at the Bondholders' Meeting. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of some of those risks and uncertainties in our Canadian securities filings. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.



Contacts:
Petrominerales Ltd.
Corey C. Ruttan
President and Chief Executive Officer
403.705.8850 or 571.629.2701

Petrominerales Ltd.
John Koch
Chief Operating Officer
403.705.8850 or 571.629.2701

Petrominerales Ltd.
Kelly D. Sledz
Chief Financial Officer
403.705.8850 or 571.629.2701

ABG Sundal Collier ASA
(engaged as Petrominerales' financial advisor)
Mark Philip Gretton
+47 22 01 60 00
mark.gretton@abgsc.no





Source: Marketwire


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