NZEC Changes Company Structure, Updates on Working Capital, Production
New Zealand Energy Corp. (NZEC or the Corporation), announced Wenesday that to save cost and simplify administration it has moved the holding company for its New Zealand subsidiary companies from Singapore to New Zealand.
The process has been undertaken by sale of the New Zealand subsidiary companies’ shares held by NZ Holdings Pty Ltd to NZEC Holdings Ltd (both wholly owned subsidiaries of NZEC) and by the transfer of all debt obligations and assets and liabilities of NZ Holdings Pty Ltd to either NZEC or NZEC Holdings Limited. These amendments have been made operative Jan. 5.
The process has involved an amendment and restatement of the Working Capital Facility Agreement (the Facility) with New Dawn Energy Limited (New Dawn) to replace NZ Holdings Pty Ltd with NZEC Holdings Limited as Guarantor.
“Moving the holding company for our New Zealand subsidiaries from Singapore to New Zealand should reduce our audit and financial administration costs by approximately $38,920 (NZD 50,000) per annum and is a part of our ongoing cost reduction and rightsizing activities,” CEO David Robinson said.
As a further amendment, New Dawn has been granted an option to accept repayment of debt due by the issue of common shares in the Company. Robinson said “the amendment was requested by New Dawn and agreed by NZEC on the basis that it provides additional flexibility regarding repayment options in respect of part or all of the debt. The exercise of the option is subject to compliance with the requirements of the TSX Venture Exchange and Canadian securities law for the issue of shares under a prospectus exemption.”
The number and deemed value of the shares which may be issued would be determined by reference to the volume weighted average price at which NZEC shares have traded in the 60 days immediately prior to the calculation date (being the date falling 5 days before the proposed date for issue of the shares) and in any event shall not be less than the lowest price as permitted by the TSX ($0.0423 or CAD 0.05).
If exercised by New Dawn, the debt to share conversion mechanism provides for the issue to New Dawn of such number of common shares in NZEC having an aggregate value (when converted to New Zealand dollars) as at the calculation date equivalent to the payment or repayment amount. The shares shall rank pari passu in all respects with the existing common shares.
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