Drillsearch Energy Limited has successfully raised US$100 million senior unsecured, guaranteed convertible bonds due 1 September 2018.
The net proceeds will be used to repay the A$100 million bridge facility provided by the Commonwealth Bank of Australia to fund the acquisition of Acer Energy Limited.
Commenting on the Convertible Bond issue, Drillsearch’s Chairman, Jim McKerlie, said “The successful completion of this raising significantly improves Drillsearch’s balance sheet strength and helps Drillsearch achieve an optimal funding mix. We are very pleased with this result which we believe delivers longer term, debt style funding more aligned to the current maturity of Drillsearch’s assets.”
The Convertible Bonds were sold primarily to European and Asian institutions during the trading halt period. The Bonds carry a fixed coupon of 6.00% per annum, paid semi-annually, for a term of approximately five years and are convertible into Drillsearch shares at an initial conversion price of US$1.66 per share, representing a conversion premium of approximately 35% above A$1.19, being the closing price of the Shares on the ASX on 26 April 2013.
Unless previously redeemed, purchased or cancelled, the Convertible Bonds will be redeemed at par on 1 September 2018. Drillsearch may also redeem after one year at par if the VWAP convertible into US dollars at the then Prevailing Rate (as defined in the terms) for any 20 consecutive dealing days is at least 175% of the conversion price and after three years at par if the VWAP convertible into US dollars at the then Prevailing Rate for any 20 consecutive dealing days is at least 130% of the conversion price.
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