Completion of the Proposed Transaction is subject to a number of conditions and other contingencies as set forth below in this news release and as set forth in the LOI, including, but not limited to: the negotiation and execution of a definitive agreement for the Proposed Transaction (the “Definitive Agreement”); any required approvals of relevant government authorities, determination of favourable tax structuring for the Proposed Transaction;
RTO With PrivateCo
The indicative terms of the LOI contemplate the following terms and conditions as part of the Proposed Transaction:
- That all of the common shares in the capital of PrivateCo will be purchased or exchanged for Common Shares of IFR at an exchange ratio determined for the Proposed Transaction
- Prior to the closing of the Proposed Transaction, IFR will complete a consolidation (the “Consolidation”) of its outstanding share capital at a rate yet to be determined
- That upon completion of the Proposed Transaction, the directors and officers of IFR will be replaced by nominees of PrivateCo
- Renaming of IFR and a change of the Ticker Symbol
- Subject to TSXV acceptance, IFR intends to complete a spin-out of IFR’s non-Mexican assets creating a new spin-out company (“
SpinCo ”) holding such assets - IFR or its wholly owned subsidiary
Petro Frontera ,S.A.P.I. de C.V. will have purchased all of the outstanding shares in the joint venture company,Tonalli Energia S.A.P.I. de C.V. (“Tonalli”) held by its joint venture partner,Grupo IDESA S.A. de C.V. - Funding of the
$US750,000 CD Offering will have been completed - Completion of a concurrent financing in relation to the Proposed Transaction in an expected range of
US$20,000,000 toUS$60,000,000 - Management, insiders, control persons, and such other persons entering into lock-ups to support the Proposed Transaction in an amount no less 30% of the outstanding IFR Common Shares
- The Definitive Agreement will contemplate a break fee in the amount of
$500,000 payable by IFR to PrivateCo upon the occurrence of certain events
Further updates and particulars of the Proposed Transaction will be provided upon IFR and PrivateCo entering into a Definitive Agreement for the Proposed Transaction.
Pursuant to the LOI and prior to the execution of a Definitive Agreement, subject to TSXV acceptance, IFR intends to complete the 10% per annum secured CD Offering for
The Convertible Debenture will have a 3 year term from the date of issuance (the “Maturity Date”) and will bear an interest rate of 10% per annum, calculated semi-annually, and payable on the Conversion Date (as defined below) or Maturity Date. The Convertible Debenture will be secured by a promissory note and a share pledge agreement, both in respect of the shares of Tonalli held by IFR or its subsidiaries. There will be no other security over the assets of IFR in relation to the Convertible Debenture. The Convertible Debenture will be convertible at PrivateCo’s option into post-Consolidation Common Shares of IFR (“Resulting Issuer Shares”) at any time prior to the Maturity Date at a conversion price equal to a 10% discount to the deemed price of the Resulting Issuer Shares on completion of the Proposed Transaction (the “Conversion Price”) provided that the minimum Conversion Price will equal
IFR announced today a non-brokered Common Share Offering for gross proceeds of up to $1,000,000 at a price of
The Common Share Offering will be completed pursuant to certain exemptions from the prospectus requirements under applicable securities laws. Subject to acceptance by IFR, in addition to other available exemption for the Common Share Offering, the Common Share Offering is open to all existing shareholders of IFR in reliance upon the prospectus exemption described in Alberta Securities Commission Rule 45-516 “
OTHER INFORMATION IN RESPECT OF THE CD OFFERING AND THE COMMON SHARE OFFERING
The closings of the CD Offering and the Common Share Offering (collectively, the “Offerings”) are subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals, including TSXV acceptance. As such, there is no assurance that IFR will complete the Offerings as described above or at all. It is anticipated that the Offerings will be completed pursuant to certain exemptions from the prospectus requirement under applicable securities laws. The Offerings may be closed in one or more tranches. The Convertible Debenture and all of the Common Shares issued pursuant to the Offerings, and any securities into which the Convertible Debenture may be converted, are subject to resale restrictions imposed by applicable law or regulation, including a statutory hold period expiring four months and a day from the closing dates of the Offerings. It is not anticipated that any new insiders will be created, nor that any change of control will occur, as a result of the Offerings. Any participation by insiders of IFR in the Offerings will be on the same terms as arm’s length investors. Depending on market conditions, the gross proceeds of the Offerings could be increased or decreased. None of the securities issued in connection with the Offerings will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them may be offered or sold in
Shares for Debt Settlement
In conjunction with the Common Share Offering, IFR has agreed to settle outstanding debt of
Trading Halt
Trading in IFR’s Common Shares on the TSXV is halted and will remain halted until the documentation required by the TSXV in relation to the Proposed Transaction has been reviewed and accepted by the TSXV.
About
IFR’s shares are listed on the TSX Venture, trading under the symbol IFR. For additional information please visit www.internationalfrontier.com.
For further information
or | ||||
(403) 215-2780 | (403) 215-2780 | |||
shanson@internationalfrontier.com | tkinnon@internationalfrontier.com |
Neither the
Forward Looking Statements
This press release contains forward‐looking statements and forward‐looking information (collectively "forward‐looking information") within the meaning of applicable securities laws. All statements, other than statements of historical fact, included herein are forward-looking information. In addition, and without limiting the generality of the foregoing, this news release contains forward‐looking information regarding: the Proposed Transaction, including the potential finalization and structuring of the Proposed Transaction and the potential terms and conditions in relation to the proposed transaction; the potential execution of a Definitive Agreement in relation to the proposed transaction and the terms and conditions of such Definitive Agreement; the required approvals for the proposed transaction, including TSXV acceptance, and regulatory, director and shareholder approvals of the Proposed Transaction; the potential issuance of Common Shares in relation to the Proposed transaction; the potential Consolidation, change of management, name change, change of ticker symbol and the
There can be no assurance that such forward-looking information will prove to be accurate. Actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects IFR’s current beliefs and is based on information currently available to IFR and on assumptions IFR believes are reasonable. These assumptions include, but are not limited to: the execution of a Definitive Agreement, the completion of satisfactory due diligence by IFR and PrivateCo in relation to the Proposed Transaction; satisfactory tax structuring of the Proposed Transaction; the satisfactory fulfilment of all of the conditions precedent to the Proposed Transaction; the receipt of all required approvals for the Proposed Transaction including director and shareholder approvals of both IFR and PrivateCo, TSXV acceptance and other regulatory approvals; the issuance of the Common Shares in relation to the Proposed Transaction and the purchase of the Tonalli shares; market acceptance of the Proposed Transaction, the Consolidation, the spin-out and the concurrent financing, and completion of the same; the value of PrivateCo in relation to the Proposed Transaction; the underlying value of IFR and its Common Shares; market acceptance of the Offerings; TSXV acceptance of the Offerings; and expectations concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws.
Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of IFR, and the potential completion of the Proposed Transaction, to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals, including TSXV acceptance; the actual results of future operations; general economic, political, market and business conditions; risks inherent in oil and natural gas operations; fluctuations in the price of oil and natural gas, interest and exchange rates; the risks of the oil and gas industry, such as operational risks and market demand; governmental regulation of the oil and gas industry, including environmental regulation; actions taken by governmental authorities, including increases in taxes and changes in government regulations and incentive programs; geological, technical, drilling and processing problems; the uncertainty of reserves estimates and reserves life; unanticipated operating events which could reduce production or cause production to be shut-in or delayed; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; encountering unexpected formations or pressures, premature decline of reservoirs and the invasion of water into producing formations; failure to obtain industry partner and other third party consents and approvals, as and when required; competition; the timing and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in IFR’s disclosure documents on the SEDAR website at www.sedar.com. Although IFR has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur.
Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of IFR as of the date of this news release and, accordingly, is subject to change after such date. However, IFR expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.
IFR seeks
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