(Gran Tierra Energy Inc., 6.Apr.2016) – Gran Tierra Energy Inc. announced that it has completed its previously announced offering of $100 million aggregate principal amount of 5.0% Convertible Senior Notes due 2021 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, in the United States and pursuant to certain prospectus exemptions in Canada. Gran Tierra has also granted the initial purchasers a 30-day right to purchase up to an additional $15 million aggregate principal amount of Convertible Notes.
The Convertible Notes will pay interest semi-annually at a rate of 5 percent per annum, and will mature on April 1, 2021, unless earlier redeemed, repurchased or converted in accordance with their terms. The Convertible Notes will be convertible into shares of Gran Tierra common stock, initially at a rate of 311.4295 shares of common stock per $1,000 principal amount of Convertible Notes. This represents an initial effective conversion price of approximately $3.21 per share of common stock. The initial conversion price represents an approximately 30 percent premium to the $2.47 per share closing price of Gran Tierra’s common stock on the NYSE MKT on March 31, 2016. The Convertible Notes will be convertible at the option of the holder at any time prior to the close of business on the business day immediately preceding the maturity date. Gran Tierra will be required to offer to repurchase the Convertible Notes if a fundamental change, as defined in the indenture relating to the Convertible Notes, occurs. In addition, the conversion rate will be increased with respect to Convertible Notes converted in connection with specified fundamental change transactions.
The net proceeds from the offering were approximately $95.4 million, after deducting the initial purchasers’ discount and the offering expenses payable by Gran Tierra. Gran Tierra intends to use the net proceeds from this sale of the Convertible Notes for general corporate purposes, which may include acquisitions and/or capital expenditures.
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