ZaZa Energy Completes Private Offering of $40 Million of 9% Convertible
Senior Notes Due 2017
HOUSTON -- October 22, 2012
ZaZa Energy Corporation (“ZaZa”) (NASDAQ: ZAZA) today announced that it has
completed the sale and issuance of $40.0 million in aggregate principal amount
of 9% Convertible Senior Notes due 2017 (the “Convertible Notes”) to qualified
institutional buyers and accredited investors in a private placement. ZaZa
intends to use the net proceeds from the offering, after discounts and
offering expenses, to fund drilling capital expenditures and leasehold
transactions and for general corporate purposes.
The Convertible Notes will be the senior, unsecured obligations of ZaZa. They
will bear interest at a fixed rate of 9.0% per year, payable semiannually in
arrears on February1 and August1 of each year, beginning February1, 2013.
Interest on the Convertible Notes will accrue from October 22, 2012. The
Convertible Notes will mature on August1, 2017, unless earlier converted,
redeemed or repurchased.
The Convertible Notes will be convertible at any time prior to the third
trading day immediately preceding the maturity date, at the option of the
holders, into shares of ZaZa’s common stock. The conversion rate will
initially be 400.0000 shares of common stock per $1,000 principal amount of
Convertible Notes (equivalent to an initial conversion price of $2.50 per
share of common stock), and will be subject to adjustment upon the occurrence
of certain events. In addition, ZaZa will, in certain circumstances, increase
the conversion rate for holders who convert their Convertible Notes in
connection with a make-whole fundamental change (as such term will be defined
in the indenture relating to the Convertible Notes).
ZaZa may not redeem the Convertible Notes prior to August1, 2015. On and
after August1, 2015, ZaZa may redeem for cash all or part of the Convertible
Notes if the last reported sale price of its common stock equals or exceeds
150% of the applicable conversion price for at least 20 trading days during
the 30 consecutive trading day period ending on the trading day immediately
prior to the date on which ZaZa delivers the notice of the redemption. The
redemption price will equal 100% of the principal amount of the Convertible
Notes to be redeemed, plus any accrued and unpaid interest to, but excluding,
the redemption date.
Upon a fundamental change (as defined in the indenture relating to the
Convertible Notes), subject to certain exceptions, the holders may require
ZaZa to repurchase some or all of their Convertible Notes for cash at a
repurchase price equal to 100% of the principal amount of the Convertible
Notes being repurchased, plus any accrued and unpaid interest to, but
excluding, the fundamental change repurchase date.
The Convertible Notes were offered inside the United States to qualified
institutional buyers and accredited investors in a private placement in
reliance on Section 4(a)(2) of and Regulation D under the Securities Act of
1933, as amended (the “Securities Act”).
The Convertible Notes and the shares of common stock into which they are
convertible have not been and will not be registered under the Securities Act
or applicable state securities laws and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable state laws.
This announcement shall not constitute an offer to sell or the solicitation of
an offer to buy any securities.
The Convertible Notes will be subject to resale and transfer restrictions in
accordance with applicable securities laws.
This press release contains forward-looking statements. Forward-looking
statements give ZaZa’s current expectations or forecasts of future events
based on assumptions and estimations that management believes are reasonable
given currently available information. Forward-looking statements in this
press release relate to, among other things, the use of proceeds from the
private placement of Convertible Notes. Information on risks and uncertainties
that could cause actual results to differ materially from those contemplated
by the forward-looking statements is available in ZaZa’s filings with the
Securities and Exchange Commission.
Sard Verbinnen & Co.
Dan Gagnier, +1-212-687-8080
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