Release Date: September 14, 2003
Octane Completes $5.6 Million Bank Financing and $1.0 Million Bridge Loan, Announces Rights Offering, Debt Conversion and Management Changes
09:43 EDT Wednesday, August 06, 2003
CALGARY, Aug. 6 /CNW/ – Octane Energy Services Ltd. (TSX-V:OES) announced today that it has established a new, larger banking facility with a Canadian chartered bank for its wholly-owned subsidiary, Pronghorn Controls Ltd. The new banking facility consists of a $5,000,000 operating line of credit bearing interest at prime plus 1/2%, a $500,000 demand loan bearing interest at prime plus 1.25% and a $100,000 corporate mastercard account repayable monthly. These facilities replace $3,500,000 in facilities previously in place with a different Canadian chartered bank.
In addition, Octane announced today its intention to proceed with a $1,400,000 rights offering to its existing shareholders. Under the rights offering, Octane expects to issue rights to acquire up to approximately 7,000,000 common shares of the Company at a price of $0.20 per share. The Company has received stand-by commitments from a number of shareholders, including its largest shareholder NEX Industries Ltd. to participate in the rights offering. The Company also completed a bridge financing in the amount of $1,000,000, which it expects to pay out from the proceeds of the rights offering. In addition, the Company has received commitments from certain existing stakeholders to convert up to $2.225 million of related party debt to equity at a price of $0.20 per share. The rights offering and debt conversions are subject to a number of conditions, including regulatory approval.
Octane also announced today that it has accepted the resignation of James Rathwell as a director and officer of the Company and of Debora Rice as an officer of the Company. Mr. J. Arthur Bray, a current director and the Chairman of the Company, has assumed the role of Interim CEO and Mr. Brian Orgnero, the current corporate controller of the Company, has assumed the role of Interim VP Finance. Mr. Orgnero is a Chartered Accountant with over 10 years of experience in public practice and industry positions. He has been the Corporate Controller of Octane since January 2001 and, prior thereto, he spent three years as the North American Controller of a TSE listed oilfield services company.
Octane is an emerging, diversified oilfield services company. The Company has grown rapidly through a series of seven acquisitions and currently provides services in four main areas: oilfield construction services, facilities construction services, small diameter pipeline construction services and electrical and instrumentation services. The Company employs approximately 500 persons at its 16 field offices strategically located across western Canada. The common shares of Octane trade on the TSX Venture Exchange under the symbol “OES”.
THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.
For further information: J. Arthur Bray, Interim CEO, (403) 206-6100, Myron Tetreault, VP Corporate Development, (403) 509-3931
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