Gran Tierra Energy Inc. (GTE) filed a Form 8K – Entry Into a Definitive Agreement – with the U.S Securities and Exchange Commission on June 30, 2016.
On June 30, 2016, Gran Tierra Energy International Holdings Ltd., a wholly-owned indirect subsidiary of Gran Tierra Energy Inc. (“Gran Tierra”), entered into a share purchase agreement (the “Acquisition Agreement”) with Tribeca Oil & Gas Inc., Macquarie Bank Limited and Rorick Ventures Group Inc., as vendors (the “Vendors”), and Petrolatina Energy Limited (“PetroLatina”) providing for the acquisition of PetroLatina for cash consideration of $525 million (the “Acquisition”). Funding for the Acquisition will consist of an initial payment of $500 million at closing, subject to closing adjustments, and a deferred payment of $25 million to be paid prior to December 31, 2016. Subsequent to the signing of the Acquisition Agreement, Gran Tierra delivered $5 million to Macquarie Bank Limited, which funds are to be held in escrow and applied to the initial payment at closing (the “Escrow Funds”). PetroLatina is a private, independent exploration and production company with assets primarily in the Middle Magdalena basin of Colombia.
Gran Tierra expects to fund the Acquisition through a combination of Gran Tierra’s current cash balance, available borrowings under Gran Tierra’s existing credit facilities, a new $130 million debt facility, and the previously announced private placement of up to $173.5 million of subscription receipts (“Subscription Receipts”), priced at $3.00 per Subscription Receipt, entitling each holder thereof to one share of common stock of Gran Tierra upon the satisfaction of certain conditions. The private placement of Subscription Receipts is expected to close on or about July 8, 2016.
The Acquisition was unanimously approved by the board of directors of Gran Tierra. The Vendors collectively hold more than 80% of the shares of PetroLatina. Under the terms of the Acquisition Agreement, it is a condition of closing that all of the remaining shares of PetroLatina are acquired pursuant to the drag-along provisions of the Articles of Association of PetroLatina upon the closing of the Acquisition. The Acquisition, which is subject to the satisfaction or waiver of customary closing conditions, including, among other things, regulatory approvals, is expected to close prior to October 31, 2016. The Acquisition Agreement also contains mutual representations and warranties of the parties covering customary matters. Each of the parties also makes various covenants in the Acquisition Agreement, including those requiring the parties to use reasonable commercial efforts to consummate the transaction.
The Acquisition Agreement may be terminated by either Gran Tierra or the Vendors under certain circumstances set forth in the Acquisition Agreement, including, among other circumstances, the failure of the Acquisition to be consummated on or before October 31, 2016. If the Acquisition Agreement is terminated by Gran Tierra as a result of the Vendors breach of any representations, warranties, covenants or obligations, the Vendors’ aggregate maximum liability will be limited to $5.0 million, and the Escrow Funds will be returned to Gran Tierra. If the Acquisition Agreement is terminated as a result of Gran Tierra breaching any representations, warranties, covenants or obligations, Gran Tierra’s maximum liability will be limited to the loss of the Escrow Funds deposited by Gran Tierra subsequent to the signing of the Acquisition Agreement.
The foregoing description of the Acquisition Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Acquisition Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated by reference herein. Dollar references herein are in U.S. dollars.
The full text of this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/1273441/000114420416112025/v443830_8k.htm
Any exhibits and associated documents for this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/1273441/000114420416112025/0001144204-16-112025-index.htm
Public companies must file a Form 8-K, or current report, with the SEC generally within four days of any event that could materially affect a company’s financial position or the value of its shares.
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