Australia's Octanex N.L. disclosed Monday that it has executed documentation for the previously announced investment by Sabah International Petroleum (SIP) in Octanex. SIP is wholly owned by Sabah Development Bank Berhad (SDB) which in turn is wholly owned by the Ministry of Finance, Sabah, a State of Malaysia.
The definitive documents have been completed pursuant to the terms agreed in the term sheets executed between Octanex and SIP in October, summarized below.
Bridge Loan Facility
SIP will provide a bridge loan facility to Octanex for an amount of $12 million with a maturity date of March 31, 2015. The bridge loan facility will be satisfied out of the Share and Convertible Notes issue, following receipt of shareholder approvals. The Bridge Loan facility will attract an interest rate of 8 percent assuming it is repaid by the Share and Convertible Note placement.
SIP is to subscribe for 40,332,663 ordinary fully paid shares for a total of $5 Million. Including this subscription, this will make SIP a holder of 21 percent of the existing listed fully paid ordinary shares in Octanex (17 percent of the total voting rights when including partly paid shares).
SIP will further subscribe for $12 million in Convertible Notes in three equal tranches with all tranches to be drawn down before June 30, 2015. The Notes will be due for redemption on June 30, 2017, but may be converted at any time prior to the maturity date, at the election of SIP, into fully paid Octanex shares at conversion prices of 15, 20 and 25 cents per share for each of the tranches.
Until June 30, 2016 SIP has the right to exercise an alternative conversion of the Notes to a 35 percent shareholding in Octanex Pte Ltd, the Singapore incorporated holding company of Octanex’s 50 percent shareholding in Ophir Production Sdn Bhd, the incorporated Joint Venture that holds the Ophir RSC with Petronas.
A cash coupon rate on the Convertible Notes of 8 percent per annum has been agreed, with a bullet payment on redemption to be satisfied by a further issue of Octanex fully paid shares to lift the Internal Rate of Return of the Note holder to 12 percent.
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