Bankers Petroleum Ltd. has agreed to invest up to $15-million (U.S.) into TSU's subsidiary which owns a 72-per-cent interest in the Kerch oil and gas project located in the Crimean Peninsula in Ukraine. The financing will be staged over 18 months with the initial financing of $2.5-million (U.S.) to close within 60 days during which Bankers will complete its due diligence. Upon completion of the financing, Bankers will own 70 per cent of the subsidiary's issued and outstanding shares. In the event the subsidiary does not acquire an additional property in the Crimean Peninsula that is acceptable to Bankers within 12 months from the initial financing, Bankers will be entitled to 80 per cent of the subsidiary's shares upon completion of the financing. Further, after Bankers has invested at least $10-million (U.S.), and, if the Crimean properties are cash flow positive from oil and gas production, Bankers has the option to acquire the balance of the subsidiary's shares that it is entitled to purchase by paying the company $1.5-million (U.S.).
Upon the closing of the initial financing, Bankers will be the operator of all of the company's Crimean properties while the company will be the field contractor for at least the next two years. Bankers and the company will create a joint management committee for the properties and will enter into a shareholders agreement for the operation and governance of the company's subsidiary.
Private placement financing
The company also announces a non-brokered private placement financing of up to $4-million to be raised by the issuance of units at 60 cents per unit. Each unit will consist of one common share and one-half of one share purchase warrant. Each whole warrant will entitle the holder to purchase a common share for a period of one year at 75 cents per share. Bankers has agreed to purchase $1-million of the private placement. The proceeds of the private placement will be used to finance the additional project acquisitions on the Crimean Peninsula as contemplated by the joint venture agreement and for general working capital. There is no finder's fee payable on this financing and the common shares and warrants issued will be subject to a four-month hold from the closing date. The private placement is subject to regulatory approval.
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