THE WOODLANDS, TX, Nov. 12, 2013 /CNW/ - Porto Energy Corp.,
("Porto" or the "Company") (TSXV:PEC), today announced that further
to the Company's October 7, 2013
press release, it has launched a non-brokered private placement of
up to 150 Units of the Company (the "Units") at a price of
CDN$10,000 per Unit (the "Offering
Price") to raise gross proceeds of up to CDN$1,500,000 on a reasonable commercial best
efforts basis (the "Offering"). Each Unit issued under the
Offering will consist of one senior secured convertible debenture
with a par value of CDN$10,000 (the
"Debenture") and one common share purchase warrant (the
"Warrant"). Each Warrant will entitle the holder to acquire
up to 200,000 common shares of the Company ("Common Shares") at a
price of CDN$0.05 per Common Share
for a period of up to 36 months from the closing date of the
Offering.
The Debentures will be direct and senior
obligations of the Company secured by the common shares of
Company's wholly-owned subsidiary Mohave Oil and Gas Corporation,
which holds the Company's interest in seven oil and gas concessions
in Portugal and, effective
May 31, 2013, USD$130 million in tax pools. The
Debentures will bear interest at a rate of 8.00% per annum, payable
quarterly in arrears, and will mature on November 30, 2016 (the "Maturity Date").
The Company, at its sole discretion, can elect
to satisfy its interest commitments through payment in cash or,
subject to regulatory approval, the issuance of Common
Shares. Subject to regulatory approval, Common Shares issued
as payment for interest commitments will be issued at a price equal
to the greater of CDN$0.05 per Common
Share or a 10% discount to the market price of the Common Shares on
the TSX Venture Exchange ("TSXV").
The Debentures will be convertible at the
holder's option into Common Shares at any time prior to the close
of business on the earlier of: (i) the business day immediately
preceding the Maturity Date or (ii) if called for redemption, on
the business day immediately preceding the date fixed for
redemption, or (iii) if called for repurchase pursuant to a change
of control, on the business day immediately preceding the payment
date, at a conversion price of $0.05
per Common Share (the "Conversion Price") during the first year of
their term (subject to adjustment in certain circumstances) and,
thereafter, at the greater of $0.10
per Common Share or the market price of the Common Shares on the
TSXV. The Debentures will not be redeemable before November 30, 2014. On or after November 30, 2014 but prior to the Maturity Date,
the Debentures will be redeemable at the Company's option at par
plus accrued and unpaid interest, provided that the volume weighted
average trading price of the Common Shares on the TSXV during the
20 consecutive trading days, ending on the fifth trading day
preceding the date on which notice of redemption is given, is not
less than 200% of the Conversion Price.
Closing of the Offering is expected to occur on
or about November 30, 2013, and may
occur in one or more tranches. The Company has agreed to pay
finders' fees of up to 6% cash to qualified persons in accordance
with TSXV policies and the requirements of applicable securities
laws. The Company will use the proceeds from the Offering for
working capital and general corporate purposes. The financing
is subject to regulatory approval including the satisfaction of
customary conditions of the TSXV.
Strategic Alternative Review Process
In addition to the Offering, and as detailed in
the Company's October 7, 2013 press
release, the Company continues to fully evaluate a range of
strategic alternatives available to it in order to preserve and
maximize shareholder value. Porto
will provide further updates on this process when the Board of
Directors has approved a definitive transaction or strategic
option, or as otherwise required by Porto's continuous disclosure requirements.
The Corporation cautions that there are no certainties that the
strategic review process will result in any transaction or, if a
transaction is undertaken, as to its terms or timing.
Porto's common
shares trade on the TSX Venture Exchange under the symbol PEC.
Porto currently has 198,954,653
common shares outstanding.
About Porto Energy Corp.
Porto Energy Corp. is an international oil and
gas company engaged in the exploration of crude oil and natural gas
in Portugal, including the
appraisal of a gas discovery. Through its wholly owned
subsidiary, Mohave Oil And Gas Corporation (a Texas corporation with branch offices in
Portugal), the Company holds
working interests in seven concessions in Portugal's Lusitanian Basin totaling 1.6
million net acres. Through its exploration efforts to date, the
Company has identified seven major exploration trends over its
concessions and generated more than 45 prospects and leads. Porto
Energy's shares trade on the TSX Venture Exchange under the ticker
symbol "PEC". For more information on Porto Energy visit www.portoenergy.com.
About Black Spruce Merchant Capital
Corp.
Black Spruce is a private merchant banking firm
focused on providing specialized financing and advisory services to
the global energy industry. Our award-winning principals have a
history of achieving success for clients based on high-level
industry focus, strong industry relationships and innovative
transaction skills. Offering advice in project, corporate and
credit syndication; equity-linked financings; mergers and
acquisitions; and strategic business development. For more
information on Black Spruce visit: www.bsmc.ca
Cautionary Statements
This press release contains certain
forward-looking statements. These statements relate to future
events or the Company's future performance. All statements other
than statements of historical fact are forward-looking statements.
The use of any of the words "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "should",
"believe", "predict" and "potential" and similar expressions are
intended to identify forward-looking statements. These statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements. No assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
These forward-looking statements are made as of the date of this
press release and the Company does not undertake to update any
forward-looking statements that are contained in this press
release, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Porto Energy Corp.