TIDMRSOX
RNS Number : 8722F
Resaca Exploitation Inc
30 May 2013
FOR IMMEDIATE RELEASE 30 MAY 2013
Resaca Exploitation, Inc.
("Resaca" or the "Company")
Disposal of substantially all assets and De-Listing from AIM
Further to the announcement made on 1 May 2013, Resaca announces
that it:
-- has signed a purchase and sale agreement conditionally to
dispose of substantially all of its assets to Legacy Reserves LP
(the "Disposal");
-- proposes cancellation of admission of the Company's
depositary interests to trading on AIM (the "De-listing");
-- expects, following completion of the Disposal, to embark on a
voluntary liquidation process and complete the wind up of the
Company and;
-- has called a Special Meeting of the Company to be held at the
offices of the Company at 1331 Lamar Street, Suite 1450, Houston,
Texas at 10.00 a.m. Central Time on 25 June 2013 for the purpose of
approving the Disposal and the De-Listing.
The Disposal and De-Listing are conditional on Shareholder
approval. Full details of the proposals, including what action
Shareholders should take, are set out in the Circular posted to
Shareholders today (the "Circular"). A copy of the Circular will be
made available on the Company's website
(www.resacaexploitation.com) and a summary is given below. Unless
otherwise defined, terms used in this announcement have the meaning
given to them in the Circular.
Shareholders should note that the Directors believe that the
proposals set out in the Circular are in the best interests of the
Company and the Shareholders as a whole. Accordingly, Shareholders
are encouraged to vote in favour of the Resolutions at the Special
Meeting.
For further information please contact:
Resaca Exploitation, Inc.
J.P. Bryan, Chairman and Chief
Executive Officer +1 713-753-1300
John J. ("Jay") Lendrum, III,
Vice Chairman +1 713-753-1400
Dennis Hammond, President and
Chief Operating Officer +1 713-753-1281
David Love, Vice President
and Treasurer +1 713-756-1755
Buchanan (Investor Relations) +44 (0)20 7466 5000
Tim Thompson
Ben Romney
finnCap Limited (Nomad and + 44 (0) 20 7220
Broker) 0500
Matt Goode, Corporate Finance
Christopher Raggett, Corporate
Finance
Victoria Bates, Corporate Broking
Proposed Disposal of the Properties, De-listing and Notice of a
Special Meeting
The Company has conditionally agreed to dispose of substantially
all of its oil and gas properties to Legacy Reserves pursuant to
the terms of the PSA. Further details of the properties subject to
the disposal are set out below.
The Consideration is $72,000,000, subject to customary
adjustments, and is payable upon Completion. Further details of the
PSA can be found in the paragraph headed "Summary of the PSA".
The Disposal will constitute a sale of substantially all of the
assets owned by the Company, which is a fundamental change of
business, pursuant to Rule 15 of the AIM Rules for Companies and a
fundamental business transaction under the Texas Business
Organizations Code, each of which requires the approval of
Shareholders (see Resolution 1 in Part III of the Circular).
Following the Disposal, it is expected that the Company will
embark on a voluntary liquidation process and complete wind-up of
the Company culminating in the Proposed Distribution. The Board
therefore believes it is not in the interests of Shareholders for
the Company to continue to incur the costs associated with
maintaining its admission to trading on AIM. The Board therefore
intends to implement the De-listing which will also require
approval of Shareholders pursuant to Rule 41 of the AIM Rules for
Companies (see Resolution 2 in Part III of the Circular).
Since the Company breached certain covenants under the
Facilities during 2012, the management team has explored numerous
strategic alternatives including corporate merger, asset sale,
recapitalization of the Company and joint property development
arrangements in order to reduce its outstanding indebtedness under
the Facilities. These efforts included the retention of a
professional business broker that specializes in the sale of oil
& gas properties to assist in such sale. Numerous potential
buyers approached the Company but all declined to enter into a
definitive agreement. Management was in regular discussions with
the lenders under the Facilities to seek time to effect a
transaction with a third party. In April 2013, the Company was
approached by Legacy Reserves with a bid of $72,000,000, subject to
customary adjustments, in Consideration to be paid 100% in cash for
the purchase of substantially all of Resaca's assets. In order for
the Company to accept the Consideration, its lenders under the
Facilities and the Torch Note had to agree to the transaction,
provide forbearances and to make considerable concessions (as
described in more detail below) in order to provide the Proposed
Distribution after all outstanding obligations are repaid and the
wind up of the Company is complete. The concessions in total are
approximately $4.7 million.
The Company estimates the Proposed Distribution to be $0.11 per
share based on estimated adjustments to the Consideration set out
in the PSA which are further detailed in the paragraph headed
"Summary of the PSA", estimates to closeout Swaps, outstanding
trade payables and projected transaction fees and windup expenses
and ongoing costs of the Company prior to the date of wind-up.
The attention of Shareholders is drawn to the following
regarding the Proposed Distribution:
The figure of $0.11 per share is based on the Company's
estimates of its assets and liabilities prior to wind-up which
cannot occur until at least 90 days following Completion and may
not occur for until some time after that.
Some of the liabilities which the Company will incur during this
period (such as fixed payables to existing vendors) may be
predicted with a degree of certainty by the Company as at the date
of the Circular but others may not.
By way of illustration of the latter category, in calculating
the figure of $0.11 per share, the Company has made certain
estimates in respect of uncured title and environmental defects
arising in respect of the Properties to be sold pursuant to the
PSA. The Purchaser must notify the Company of any such defects on
or prior to the Defect Notice Date and the Company then has the
option to cure such defects during a period of 90 days after the
Defect Notice Date. There may however be defects notified under
this procedure which the Company is unable to cure and in these
circumstances the Consideration will be decreased pursuant to the
dispute mechanisms of the PSA. The Company has no reason to expect
a notification under this procedure but it may be that, if one is
made, the reduction of the Consideration may exceed the estimates
which the Company has made in respect of uncured title and
environmental defects to such an extent that it entirely
extinguishes the Company's ability to pay the Proposed
Distribution.
In this regard it should further be noted that in connection
with the execution of the PSA, the Purchaser has deposited $3.6
million into escrow, which will be credited toward the
Consideration at Completion. In the event that the PSA is
terminated by the Purchaser because of a breach by the Company,
including a breach of exclusivity, or because the Shareholders do
not approve of the Disposal at the Special Meeting, the deposit
will be refunded to the Purchaser and the Company will be required
to pay a termination fee of $3.6 million to the Purchaser. In such
circumstances the Company will probably not be able to make the
Proposed Distribution.
Furthermore as at the date of the Circular, the Company is not
certain of the relevant date in respect of the entitlement by
Shareholders to payment of the Proposed Distribution as this will
depend on how long the wind-up process takes. The Company
undertakes to give shareholders regular updates via RNS on the
wind-up process and the likely date of the Proposed
Distribution.
Shareholders are therefore advised to take careful account of
these factors in making any decision based on the Proposed
Distributions the final amount of which may be less than the
estimated amount.
The Directors of the Company strongly believe all other options
have been fully exhausted and liquidation is a highly probable
outcome should Resolution 1 not be passed. In addition, Resolution
2 provides for the De-listing which the Directors believe is in the
best interests of the Company and its Shareholders in order to
reduce Company's expenses during the wind-up period. The Directors
also believe that should Resolution 1 not be passed, bankruptcy
proceedings will be immediately initiated by the Company's lenders
and liquidation under insolvency proceedings will result in there
being no surplus available for distribution to the
Shareholders.
The required vote needed to pass Resolution 1 is two-thirds of
all outstanding Common Shares and Depositary Interests. The
required vote to pass Resolution 2 is 75% of the votes cast by
Shareholders at the Special Meeting.
Abstaining from the vote is the same as a "no vote" on
Resolution 1 and will negatively impact the needed vote to approve
Resolution 1 and consummate the Disposal.
The Board has convened the Special Meeting to be held at the
offices of the Company at 1331 Lamar Street, Suite 1450, Houston,
Texas, at 10.00 a.m. Central Time on 25 June 2013 for the purpose
of Shareholders considering and, if thought fit, passing the
Resolutions implementing the Disposal and the De-listing. The
Notice, which sets out the terms of the Resolutions in full, is set
out in Part III of the Circular.
The principal purpose of the Circular is to give Shareholders
the reasons for, and details of, the Disposal and the De-Listing,
to explain how the Company will conduct its operations following
Completion, to explain why the Directors unanimously consider that
the Disposal and the De-listing are in the best interests of the
Company and its Shareholders as a whole and to recommend that
Shareholders vote in favor of the Resolutions.
Shareholders should be aware that if Resolution 1 is not passed
and the Disposal does not proceed, the significant concessions
agreed with the lenders under the Facilities pursuant to the
Subsequent Forbearance Agreements and with Torch as to the Torch
Note described earlier will cease to bind such lenders and they
will likely foreclose on the Company's assets, initiate insolvency
proceedings or take other enforcement actions, such as suing to
enforce payment of the obligations.
Background to and reasons for the Disposal and the
De-Listing
The Disposal and De-listing are being proposed owing to the
culmination of a series of events including a breach of financial
covenants under the Facilities, ageing outstanding payables and
being fully drawn under the Facilities, the details of which are
more fully described below.
Financing arrangements
On 30 June 2010, the Company entered into the Torch Note with
Torch for $1,854,722. The Torch Note had a maturity date of 1
October 2012 and bore interest at Amegy Bank NA's prime rate plus
2%. At 30 June 2010, the interest rate was 7.0%. On 15 December
2010, the Torch Note was amended to increase the outstanding
balance to $1,915,800, increase the interest rate provisions,
provide for subordination to the Subordinated Credit Facility in
addition to the Company's Senior Credit Facility and extend the
maturity date as further described below.
On 21 December 2010, the Company entered into the Subordinated
Credit Facility for $20 million over a period of four-years which
bears Cash Interest at 9.5% per year per annum or 12.0% PIK
Interest per annum. The Subordinated Credit Facility contains
certain financial ratio restrictions and other customary covenants.
This credit facility matures 31 December 2014. Proceeds from the
Subordinated Credit Facility were used to repay pre-existing debt
facilities and for general corporate purposes.
On 7 January 2011, the Company also entered into the Senior
Credit Facility for $75 million with Regions Bank. The Senior
Credit Facility contains certain financial ratio restrictions and
other customary covenants, including a requirement to hedge at
least 75% of proved developed producing reserves through December
31, 2014. This credit facility matures 7 January 2014. Proceeds
from the Senior Credit Facility were used to repay a portion of
existing debt facilities and for general corporate purposes. The
Senior Credit Facility is governed by semi-annual borrowing base
redeterminations assigned to the Company's proved crude oil and
natural gas reserves.
Breach of financial covenants
The Company's interim results released on 30 March 2012 noted
that it was in breach of certain financial covenants under both its
Senior Credit Facility and its Subordinated Credit Facility.
In particular, the breach of the debt to EBITDA ratio and the
EBITDA to interest ratio financial covenants of the Subordinated
Credit Facility caused a breach of the Senior Credit Facility.
These breaches required classification of the Facilities as current
liabilities on the Company's balance sheet which in turn caused a
failure of the current asset to current liability ratio financial
covenant of both Facilities.
The Company remains in default under both Facilities as of the
date of the Circular.
Financial and operational consequences of breach
As a result of the covenant breach the PIK Interest rate on the
Subordinated Credit Facility increased by 2% to 14% in May 2012 and
the interest rate on the Senior Credit Facility increased by 3.5
percent to 7.5 percent in September 2012. The Company's total
indebtedness has continued to increase due to the accrual of PIK
Interest and the Make-Whole provision under the Subordinated Credit
Facility and the accrual of PIK Interest under the Torch Note. The
current interest rate on the Torch Note is 14%. The Torch Note
matures on the earlier of 31 January 2014 or 30 days after Senior
Payment In Full.
In July 2012, the lenders under the Subordinated Credit Facility
delivered a standstill notice to the lenders under the Senior
Credit Facility pursuant to the terms of the intercreditor
agreement. The standstill agreement commenced no earlier than July
3, 2012 and expired around December 30, 2012. Further, the lenders
under the Subordinated Credit Facility have entered into a
subsequent forbearance agreement with the Company dated 29 May 2013
in order to facilitate the Disposal. The forbearance provided by
the lender under this agreement is in effect from 29 May 2013 to 28
June 2013 and provides that the lender will forbear from exercising
the rights and remedies available under the credit agreement and
other loan documents; provided that the lender may continue to
monitor the Company's operations and administer the obligations in
accordance with the terms of the loan documents. Interest will
continue to accrue during the forbearance period and be due and
payable in accordance with the loan documents. Pursuant to the
forbearance agreement, the Company may repay the loans and other
obligations under the Subordinated Credit Facility in full in the
amount of $32,250,000, plus out-of-pocket legal expenses incurred
by the lenders (the "Settlement Amount") which is $3.2 million less
than what they are currently owed. In addition, the lenders will
increase or decrease the Settlement Amount by the amount greater or
less than $726,082 due to close out the currently outstanding Swaps
subject to a maximum increase or decrease of $500,000. Stated a
different way, the lenders under the Subordinated Credit Facility
will pay the first $500,000 of losses on the closeout of the Swaps
greater than $726,082 and will realize the first $500,000 of
gain.
The lenders under the Senior Credit Facility sent a letter to
the Company in August 2012 expressly retaining and reserving all of
the rights and remedies available to them under the Senior Credit
Facility, indicating that they do not waive any events of default
which have occurred under the Senior Credit Facility, and invoking
the default rate of interest. The lender under the Senior Credit
Facility has entered into a subsequent forbearance agreement with
the Company dated 29 May 2013 in order to facilitate the Disposal.
The forbearance provided by the lender under this agreement is in
effect from 29 May 2013 to 28 June 2013 and provides that the
lender will forbear from exercising rights and remedies available
as a result of the Company's existing defaults including the (1)
the right to accelerate payments due, (2) rights to enforce
security interests and (3) the right to file involuntary bankruptcy
against the Company until the earlier of 28 June 2013 or the date
of any forbearance termination event. This forbearance also
provides the Company in certain circumstances with an interest
abatement which eliminates the Cash Interest requirement and allows
for accrual of interest at a rate of 4% per annum if the Disposal
occurs on or prior to 28 June 2013. The projected cumulative
savings on this interest abatement is $192,500.
Torch has also agreed that the Torch Note may be satisfied in
full by the payment of $1,340,456 , which is $1.3 million less than
what is currently outstanding.
It should therefore be noted for the avoidance of doubt that,
both the lenders under the Subordinated Credit Facility and the
lenders under the Senior Credit Facility are entitled to
immediately commence enforcement action against the Company which
could include insolvency or liquidation proceedings against the
Company in the event that the Subsequent Forbearance Agreements
expire in accordance with their terms or the Disposal does not
occur. In this eventuality, the Company will be unable to make the
Proposed Distribution and, indeed, expects to be unable to make any
return to Shareholders.
The Company is currently unable to draw down funds under the
Senior Credit Facility. Its capital constraints limit the Company's
ability to seek to increase its production and operating cash flows
sufficiently to bring the Facilities back into covenant compliance
and accordingly the Company's capital projects have been limited to
those necessary projects which can be funded through operating cash
flow. In addition, our trade payables outstanding in the amount of
$1.5 million cannot be reduced without completing the Disposal. The
Company believes that there is a risk of vendors filing lawsuits
and liens against its assets for payment. The Company is also under
a cross-default under the Facilities and the counterparties to the
Swaps, which technically are due immediately.
In conclusion, due to the Company being in continued default
under the Facilities and enforcement rights available to the
lenders under the Facilities, it has become imperative the Company
realize cash in the near term in order to enable it to pay off its
indebtedness under the Facilities and eliminate the risk of the
lenders under those Facilities taking enforcement action, including
foreclosing on the Company's assets, initiating insolvency
proceedings or suing to enforce payment of the obligations.
Proposed course of action
Having investigated a number of alternative fundraising
strategies, the Board is proposing that it should seek to alleviate
the constraints on the Company's operations and prospects described
above through the Disposal.
The Board's immediate goal is to consummate the Disposal to
enable the Company to pay off its indebtedness under the Facilities
and the Torch Note, terminate the Swaps and make payments to
vendors on past due trade payables. The amounts due to the lenders
under the Company's Senior Credit Facility, Subordinated Credit
Facility and the Torch Note are $32,818,000, $32,250,000 and
$1,340,456, respectively (adjusted for those concessions provided
by the lenders under each of the forbearance agreements).
Additionally, the Company has previously entered into Swaps to
hedge against the risk of falling crude oil prices. As of 3 May
2013, those Swaps were "out-of-the money" to the Company in the
amount of $726,082. This is a senior secured obligation of the
Company and will be due and payable at the date of the Disposal.
The Company also has outstanding trade payables as of 3 May 2013 in
the amount of $1.5 million. These trade payables, as well as the
transaction fees and expenses associated with the Disposal and the
costs to de-list from AIM, would be paid as soon as practicable
after Disposal. Once the above obligations are paid, management
will wind-up the affairs of the Company.
If the Company is successful in completing the Disposal and
staying within its projected budget, it plans to make a Proposed
Distribution in the amount of $0.11 per Common Share and Depositary
Interests outstanding. As of 1 May 2013 the Company had 20,805,743
shares outstanding.
Subject to the passing of the Resolutions, the Board intends to
make application to the London Stock Exchange for the De-listing.
Under the AIM Rules, the Company is required to give at least 20
Business Days' notice of De-Listing to the London Stock Exchange.
Such notice was given on 23 May 2013. Additionally, De-Listing will
not take effect until at least 5 Business Days have passed
following the passing of Resolution 2 which is inter-conditional
upon the passing of Resolution 1. If the Resolutions are passed at
the Special Meeting, it is proposed that the De-Listing will take
effect at 7.00 a.m. on 5 July 2013.
As noted earlier, the lenders under the Facilities are entitled
to commence enforcement action against the Company which could
include insolvency or liquidation proceedings against the Company
in the event that the Subsequent Forbearance Agreements expire and
the Disposal does not occur. In this eventuality, the Company will
be unable to make the Proposed Distribution and, indeed, expects to
be unable to make any return to Shareholders.
Summary of the Properties
Lease/Unit Operator March Net Net Proved Proved 3P 3P PV10
2013 Revenue Operating Reserves PV10 Reserves
Production (March Income (Boe) (Boe)
(Boepd) 2013) (March
2013)
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Cooper
Jal Unit Resaca 324 $760,905 $613,158 9,175,077 $213,332,100 10,150,915 $245,026,720
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Edwards
Grayburg
Unit Resaca 56 140,463 93,368 150,840 3,388,660 2,081,812 49,805,240
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Jordan
San
Andrews
Unit Resaca 57 118,923 37,675 1,771,008 40,064,350 1,771,008 40,064,350
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Kayser
Leases Resaca 5 11,635 (61,708) 1,140 3,900 1,140 3,900
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Kermit
Leases Resaca 74 154,682 53,180 1,284,755 32,033,030 3,851,000 89,600,790
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Langlie
Jal Unit Resaca 72 156,699 83,306 1,180,485 5,784,950 2,144,725 25,189,470
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
McElroy
Leases Resaca 37 82,167 64,393 193,462 4,208,160 193,462 4,208,160
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
BTBN Leases Resaca 2 5,495 (16,537) 3,900 98,630 3,900 98,630
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Cotton Cimarex 35 N/A N/A N/A N/A N/A N/A
Draw Deep
(1)
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Cotton
Draw
Shallow Resaca 5 11,901 5,296 205,723 4,926,910 357,030 7,906,590
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
University
Lands
Leases Eland 0 0 0 0 N/A 0 N/A
------------ ---------- ----------- ----------- ---------- ----------- ------------- ----------- -------------
Total Oil &
Gas Property 668 $1,442,870 $530,820 13,966,390 303,840,690 20,554,992 $461,903,850
------------------------ ----------- ----------- ---------- ----------- ------------- ----------- -------------
Proved and 3P Reserves and PV10 provided in the table above are
as of June 30, 2012. In addition to the oil and gas properties
outlined in the table above, the Disposal includes the Odessa Field
Office and other equipment utilized in the day to day operations of
the Properties.
Summary of the PSA
Pursuant to the PSA, the Company has agreed to sell to the
Purchaser all of its right, title and interest in and to the
Properties for the Consideration as of the Effective Date, subject
to certain customary adjustments upward or downward for (1) uncured
title defects, (2) uncured environmental defects, (3) title
benefits, (4) costs and expenses attributable to periods prior to
the Effective Date or (5) the exercise by third parties of
preferential rights to purchase. The Purchaser will have an
opportunity prior to Completion to investigate the title to and
environmental condition of the Properties. The Purchaser must
notify the Company of any defects on or before the Defect Notice
Date and the Company shall have the option but not the obligation
to cure such defects either before or within 90 days after the
Defect Notice Date. The Consideration will be decreased for any
uncured title defects or environmental defects pursuant to the
dispute mechanisms of the PSA. Price adjustments are subject to
meeting an individual defect threshold of $50,000 and an aggregate
defect deductible (2% of the Consideration). Either the Company or
Purchaser may terminate the PSA without further liability in the
event the sum of the adjustments to the Consideration with respect
to title defects, environmental defects and certain other matters
exceed 20% of the Consideration. In connection with the execution
of the PSA, the Purchaser has deposited $3.6 million into escrow,
which will be credited toward the Consideration at Completion. In
the event that the PSA is terminated by the Purchaser because of a
breach by the Company or because the shareholders do not approve of
the Disposal at the Special Meeting, the deposit will be refunded
to the Purchaser and the Company will be required to pay a
termination fee of $3.6 million to the Purchaser.
Completion is subject to the satisfaction of a number of
conditions, including the ability to obtain Shareholder approval at
the Special Meeting.
Pursuant to the PSA, the Company has agreed to indemnify the
Purchaser, its affiliates and their respective officers, directors,
employees and agents (the "Purchaser Indemnified Parties") from and
against all losses that Purchaser Indemnified Parties incur arising
from (i) any breach of the Company's representations, warranties or
covenants in the PSA and (ii) retained obligations of the Company
including among other things claims for bodily injury or death
arising prior to Completion and certain third party claims with
respect to ownership, operation or maintenance of the Properties
arising prior to Completion. The Purchaser agreed to indemnify the
Company, its affiliates and their respective officers, directors,
employees and agents (the "Company Indemnified Parties") from and
against all losses that Company Indemnified Parties incur arising
from or out of (i) any breach of the Purchaser's representations,
warranties or covenants in the PSA, (ii) ownership and operations
of the Properties by the Purchaser (relating to periods after
Completion) to the extent such losses are not matters for which
Company has indemnified the Purchaser Indemnified Parties, and
(iii) certain obligations assumed by the Purchaser with respect to
the Properties, including environmental matters arising out of
conditions or obligations prior to or after Completion. The
Company's indemnification obligations are subject to an individual
threshold of $100,000, an aggregate deductible of 3% of the
Consideration and a cap equal to 5 per cent of the Consideration.
Obligations of indemnification survive for three months after
Completion, after which all claims are waived.
Use of Proceeds
Accordingly, after the cost of the transaction and assuming no
adjustments with respect to environmental or title matters pursuant
to the PSA, management estimates that Resaca's net receipts in
respect of the Disposal will amount to approximately $70.5 million,
of which $32,818,000 will pay off the amounts owed under the Senior
Credit Facility, $32,250,000 will pay off amounts owed under the
Subordinated Credit Facility and $1,340,456 will pay off amounts
owed under the Torch Note. As a result, all of these obligations
will be fully satisfied. Total indebtedness under the Facilities
and the Torch Note are estimated as of 28 June 2013, the proposed
date of Completion.
The balance of the net receipts from the Disposal after
repayment of the Facilities and the Torch Note are planned to be
applied to pay the Company's past due vendor invoices and to
terminate Swaps, estimated at $1.5 million and $0.7 million,
respectively as of 3 May 2013.
The Company's operations and strategy following the Disposal and
De-Listing
Following the Disposal and the De-listing, the Company's only
assets will be the Retained Property and the Company has retained
these assets only because the Purchaser required their exclusion
from the Disposal.
The Board will therefore make efforts to dispose of the Retained
Property in a manner which is likely to provide value for
shareholders within a reasonable time frame following
Completion.
Following an orderly winding down of the Company's affairs,
however, the Board intends to put in place procedures to wind the
Company up regardless of whether it has succeeded in disposing of
the Retained Property.
Shareholders should note that following the De-listing, no
dealing facility will be offered and any transaction in
Common Shares or Depositary Interests would need to be
negotiated privately directly between the buyer and seller. As a
result, the liquidity and marketability of Common Shares will be
significantly reduced and it may be difficult to place a fair value
on any sale.
Special Meeting
Purpose of the Special Meeting
Completion is conditional upon the passing of the Resolution 1
at the Special Meeting. Accordingly, Shareholders will find in Part
III of the Circular a notice convening the Special Meeting to be
held at the offices of the Company at 1331 Lamar Street, Suite
1450, Houston, Texas at 10.00 a.m. Central Time on 25 June 2013 at
which time the Resolutions will be proposed.
Resolutions:
Resolution 1: That the Disposal to the Purchaser in accordance
with the terms of the PSA be and is hereby approved and that the
officers of the Company be authorized to take all such steps as any
of them may consider necessary or desirable to implement and give
full effect to the intentions of the parties under the PSA
(including waiver or variation of the terms and conditions of the
PSA).
Resolution 1 will be proposed as an ordinary resolution of the
Company requiring the approval of the affirmative vote of two
thirds of all outstanding voting stock.
Resolution 2: Subject to the passing of Resolution 1, that the
De-listing be and is hereby approved.
Resolution 2, which is conditional upon the passing of
Resolution 1, proposes the De-listing. Under the AIM Rules , it is
a requirement that the De-listing must be approved by not less than
75% of votes cast by shareholders in a "general meeting" (for UK
registered companies) which for these purposes means the Special
Meeting. Accordingly, the Notice of Special Meeting in Part III of
the Circular contains a resolution to approve the De-listing.
Importance of the vote
The Directors are of the opinion that it is imperative the
Company be able to pay off all of its indebtedness under the
Facilities and the Torch Note (subject to those certain concessions
made by the lenders under each of the respective forbearance
agreements), terminate the Swaps and make payments to vendors on
past due invoices. The Disposal is expected to allow the Company to
achieve this goal. Shareholders should be aware that if Resolution
1 is not passed and the Disposal does not proceed, the significant
concessions agreed with the lenders under the Facilities pursuant
to the Forbearance Agreements and with Torch as to the Torch Note
described earlier will cease to bind such lenders and they will
likely take enforcement action, such as foreclosing on the
Company's assets, initiating insolvency proceedings or suing to
enforce payment of the obligation. Accordingly, Shareholders are
encouraged to vote in favour of the Resolutions at the Special
Meeting.
Board Recommendation
The Board considers the Disposal and the De-listing to be in the
best interests of the Company and its Shareholders as a whole.
Accordingly, the Board recommends that Shareholders vote in favor
of the Resolutions to be proposed at the Special Meeting, as they
intend to do in respect of their own beneficial holdings of, in
aggregate, 3,883,437 Common Shares representing 18.67 percent of
the current issued share capital of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCWGUCWAUPWUAU
Resaca (LSE:RSOX)
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Resaca (LSE:RSOX)
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부터 6월(6) 2023 으로 6월(6) 2024