AIP Sells Stake in Kazakhstan License 1551
American International Petroleum
|Thursday, January 29, 2004
American International Petroleum has sold 85% of the outstanding shares of it's newly created, wholly owned subsidiary, Caspian Gas Corporation, for $5,050,000 and a 15% Carried Interest through full development of its License 1551, the Shagyrly-Shomyshty gas field, in the Republic of Kazakhstan. To enable the transaction, the Company transferred the License to CGC from another of its wholly owned subsidiaries, American International Petroleum Kazakhstan. The Company will retain the remaining outstanding shares of CGC.
Under terms of the deal, the purchaser, PetroCaspian LLC, a New York limited liability company, will obtain and maintain, for the benefit of CGC, an initial line of credit of not less than $50 million to initiate and conduct operations of CGC. The initial phase of development of the License is anticipated to commence in early 2004. A lender has been obtained to provide the financing to fund the full development of the License, which is estimated to cost $189 million.
The proceeds from the sale will be utilized to pay certain of the Company's outstanding domestic and foreign debt obligations, with the balance to be used for working capital, which includes the cost of completing an independent audit to enable the Company to resume timely filing of its financial statements with the Securities and Exchange Commission. The Company is working closely with its lenders to complete agreements that will address current and long-term secured note obligations.