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CALGARY, AB, Sept. 3, 2021 /CNW/ - Petro-Victory Energy Corp.
("Petro-Victory" or the "Company") (TSXV: VRY.V) is pleased to
announce execution of definitive agreements on a series of
financing transactions previously announced on November 25th, 2020 (the
"Transactions") which refinance existing debt on significantly
improved terms, through a structure which includes a new
US$5 million debt facility.
Financing Highlights
- Established a new US$5.0 million
secured loan with a 5-year term and average net interest cost below
2% annually.
- Acquired a CAD$14,848,665 limited
partnership interest in the newly formed energy-focused Oppenheimer
Resources III investment fund ("OR III") through an in-kind
subscription secured by Petro-Victory restricted shares valued at
CAD$6.48 per share.
- Retired the existing US$1.4
million 9.0% debt facility with PPF 9 LLC ("PPF 9") that was
established on August 29, 2018.
- Retired US$2.0 million 9.0% debt
with 579 Max Ltd. ("579 Max") that was established on November 19, 2020.
- Retired US$700 thousand 9.0% debt
with 579 Max that was established on July
15, 2021.
- Secured additional equity capital of CAD$2,031,275 through the exercise of PPF 9 and
579 Max warrants and issuance of 992,625 Petro-Victory Energy
common shares at strike prices ranging between CAD$2.00 and CAD$2.20.
Financing Details
Petro-Victory has closed the
Transactions with OR III, a Luxembourg investment group and with PPF 13
LLC ("PPF 13"), a Delaware limited
liability company that is a wholly owned subsidiary of Dallas based Petroleum Production Finance,
Inc.
The Company has entered into a new secured loan agreement with
PPF 13 for US$5 million ("Loan
Agreement"), payable over a term of five years with annual
principal payments of US$500,000 plus
accrued interest at a rate of seven-point one percent (7.1%) on the
unpaid balance. At maturity in five years, the remaining
outstanding balance of US$2.5 million
will become due.
Oppenheimer's new fund, OR III invests in mid-sized
international oil and gas companies. Petro-Victory meets OR III's
investment criteria and has made a €10,000,000 (CAD$14,848,665) in-kind subscription to the fund
providing consideration through the conveyance and assignment of a
Secured Promissory Note.
The Secured Promissory Note in the amount of CAD$14,848,665 (subject to FX adjustments at
closing) is secured by a collateral pledge against 2,289,694 of
Petro-Victory restricted voting shares in a private placement to
PPF 13. The restricted shares are valued at CAD$6.48 / share, a 324% premium to the Company's
previous closing share price of CAD$2.00 / share on September 2, 2021.
Petro-Victory has also issued 375,000 warrants to PPF 13 with an
exercise price of CAD$2.00 / share.
OR III will pay a guaranteed interest coupon of 2.5% on the
Company's CAD$14,848,665 investment,
resulting in average net interest expense to the Company of less
than 2% annually against the US$5
million loan facility.
Retirement of Existing Debt Facilities and Execution of
Warrants
Having secured this new financing, the Company has
retired its existing secured notes with PPF 9 and 579 Max, which
total US$4.1 million.
With the retirement of its August 29,
2018 secured financing, PPF 9 has elected to exercise its
105,000 warrants in Petro-Victory unrestricted common shares at
their strike price of CAD$2.00 per
share, resulting in cash proceeds to the Company of CAD$210,000.
With the retirement of its November 19,
2020 secured financing, 579 Max has elected to exercise its
657,500 warrants in Petro-Victory unrestricted common shares at
their strike price of CAD$2.00 per
share, resulting in cash proceeds to the Company of CAD$1,315,000.
With the retirement of its July 15,
2021 secured financing, 579 Max, Ltd has elected to exercise
its 230,125 warrants in Petro-Victory unrestricted common shares at
their strike price of CAD$2.20 per
share resulting in cash proceeds to the Company of CAD$506,275.
Richard Gonzalez,
Petro-Victory CEO commented:
"I'm delighted to have finalized this series of financing
transactions with PPF 13 and Oppenheimer. This structure has given
Petro-Victory a unique opportunity to invest in an energy-focused
fund to diversify our investment profile, retire our existing debt,
and provide capital to fund our ongoing work program at an
attractive net interest cost which benefits our shareholders.
We are truly pleased to partner with Oppenheimer Resources
and PPF 13."
About Petro-Victory Energy Corp.
Petro-Victory Energy Corp. is engaged in the acquisition,
development, and production of crude oil and natural gas resources
in Brazil. The company holds
operating and working interests in nineteen (19) licenses totaling
129,524 acres in two (2) different producing basins in Brazil. Petro-Victory generates accretive
shareholder value through disciplined investments in high impact,
low risk assets. The Company's Common Shares trade on the TSX
Venture Exchange ("TSXV") under the ticker symbol VRY.V.
Cautionary Note
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of
the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding Petro-Victory's
future plans and operations, certain statements in this press
release are "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian securities legislation (collectively, "forward-looking
statements"). In some cases, forward-looking statements can be
identified by terminology such as "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "intend",
"may", "objective", "ongoing", "outlook", "potential", "project",
"plan", "should", "target", "would", "will" or similar words
suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak
only as of the date thereof and are expressly qualified by this
cautionary statement.
Specifically, this press release contains forward-looking
statements relating to but not limited to: the Company offerings,
our business strategies, plans and objectives, and drilling,
testing and exploration expectations. These forward-looking
statements are based on certain key assumptions regarding, among
other things: our ability to add production and reserves through
our exploration activities; the receipt, in a timely manner, of
regulatory and other required approvals for our operating
activities; the availability and cost of labor and other industry
services; the continuance of existing and, in certain
circumstances, proposed tax and royalty regimes; and current
industry conditions, laws and regulations continuing in effect (or,
where changes are proposed, such changes being adopted as
anticipated). Readers are cautioned that such assumptions, although
considered reasonable by Petro-Victory at the time of preparation,
may prove to be incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. These and additional risk factors
are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities
regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to
forward-looking statements in this press release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Petro-Victory's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Petro-Victory that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Petro-Victory does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
SOURCE Petro-Victory Energy Corp.