At the same time, Lundin will subscribe to approximately 10.3 million shares in PetroFalcon for C$0.80 per share through a private placement valued at $8 million. Following these transactions, Lundin will become the largest shareholder in PetroFalcon, with a shareholding of approximately 42.5%.
Lundin said that Lundin Latina de Petroleos (Lundin Venezuela) has approximately $0.6 million in cash and approximately $21.4 million in accounts receivable from the parent company. The accounts receivable will be assigned to PetroFalcon and paid at closing.
As part of the private placement, PetroFalcon will also issue five million warrants to Lundin, where each warrant gives Lundin the right to subscribe for one common share in PetroFalcon at a subscription price of C$1.20. The warrants are exercisable for two years from completion of this transaction.
In total, PetroFalcon will issue approximately 64 million shares to Lundin, and PetroFalcon will receive Lundin Venezuela’s 5% interest in the Baripetrol oil and gas production joint venture in Venezuela, as well as $30 million in cash from the acquisition and private placement.
Following these transactions, PetroFalcon will have approximately 150 million common shares outstanding and 162 million common shares on a fully diluted basis. PetroFalcon will use the proceeds from the transaction to fund its capital expenditure commitments and business development activities.
The agreements are subject to approval from the relevant regulatory authorities.
