Kulczyk Investments S.A announces amendment to terms of loan to Kulczyk Oil
CALGARY, Dec. 19, 2012 /CNW/ - Kulczyk Investments S.A. ("KI") announces it
has agreed with Kulczyk Oil Ventures Inc. ("KOV") to amend the terms of a June
2012 loan agreement (the "Original Agreement") which provides for KI to loan
KOV up to US$12,000,000. Under the Original Agreement the Loan had a
maturity date of December 31, 2012.
Under the terms of the amended agreement (the "Amended Agreement"), the term
of the Loan was extended by one year to December 31, 2013 (the "Maturity
Date") and all amounts owing under the Loan were made automatically
convertible into common shares of KOV (the "KOV Shares") upon the completion
by KOV of an "IPO" prior to the Maturity Date or, alternatively, convertible,
at the option of KI, into KOV Shares at any time during the term of the Loan.
The Amended Agreement provides that KOV shall use its commercially reasonable
efforts to complete an IPO by no later than the Maturity Date.
For the purposes of the Amended Agreement, an "IPO" is defined as: (a) the
initial public offering or the admission to trading of the KOV Shares on the
AIM Market of the London Stock Exchange; (b) the acquisition of KOV by an
entity listed on a recognized stock exchange for securities of such entity;
(c) the acquisition of an entity listed on a recognized stock exchange by KOV
for securities of KOV; or (d) any transaction or arrangement which results in
KOV being listed, directly or indirectly, on a recognized stock exchange other
than the Warsaw Stock Exchange ("WSE"). In the event of an IPO, the Amended
Agreement provides for the automatic conversion of the outstanding principal
amount under the Loan, together with all accrued and unpaid interest thereon
and any other fees or costs payable by KOV to KI in connection with the Loan,
if any, (collectively, the "Obligations") into KOV Shares. If KOV Shares are
issued by KOV in connection with the IPO, the conversion price will be either
the offer price per KOV Share in the IPO or the issue price per KOV Share in
the IPO. If no KOV Shares are issued by KOV in connection with the IPO, the
conversion price will be either the volume weighted average price ("VWAP") of
a KOV Share on the WSE during the five trading days prior to and excluding the
date of the IPO or the exchange ratio per KOV Share in the IPO.
If KI chooses to exercise its option to convert any or all of the outstanding
Obligations into KOV Shares at any time during the term of the Loan, the
conversion price will be the VWAP of a KOV Share on the WSE during the five
trading days prior to, and excluding, the date of the conversion election
Under the terms of the Amended Agreement, interest, payable monthly, remains
unchanged from the Original Agreement at 15% per annum. The Loan is currently
drawn at $10 million and the balance of the Loan is expected to be drawn down
by the end of December 2012.
The total number of KOV Shares issuable to KI if the Obligations are converted
is uncertain as the amount of the Obligations to be converted and the final
conversion price will be determined in the future.
KI presently holds 240,807,193 KOV Shares or approximately 49.99% of the
issued and outstanding KOV Shares. In addition, Radwan Investments GmbH
("Radwan") holds 26,628,360 KOV Shares or approximately 5.53% of the issued
and outstanding KOV Shares. Radwan may be considered to be a joint actor to
KI, as a result of an agreement in place between Radwan and KI dated September
15, 2010, which entitles Radwan to participate in a percentage of KI's
investments and provides that Radwan will vote any securities it purchases
pursuant to such agreement in accordance with the directions of KI. KI and
Radwan collectively hold 267,435,553 KOV Shares or approximately 55.52% of the
issued and outstanding KOV Shares. KI is the only party that is obligated to
advance funds to KOV pursuant to the Loan. Radwan is not a party to the
Original Agreement or the Amended Agreement.
Dr. Jan Kulczyk, beneficially owns or controls, directly or indirectly, 68.33%
of the outstanding shares of KI.
As KI is an accredited investors pursuant to National Instrument 45-106 -
Prospectus and Registration Exemptions ("NI 45-106"), Section 2.3 of NI 45-106
was relied upon with respect to the entering into of the Original Agreement
and the Amended Agreement.
Kulczyk Investments S.A 13-15 Avenue de la Liberte L-1931 Luxembourg
SOURCE: Kulczyk Investments S.A.
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CO: Kulczyk Investments S.A.
NI: FIN LOAN MNA
-0- Dec/19/2012 22:24 GMT
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