Calgary-based Veraz Petroleum Ltd. (TSXV: VRZ.V) and Birch Lake Energy Inc. (TSXV: BLK.V) have amended the terms of its previously announced non-brokered private placement.
Birch Lake will now issue and sell up to a maximum of 10,000,000 common shares at a price of $0.10 per share and up to a maximum of 8,333,334 Birch Lake shares on a flow-through basis at a price of $0.12 per share. Birch Lake had previously announced that under the Birch Lake financing, it would sell up to 8,333,350 Birch Lake shares at a price of $0.12 per share and up to 7,142,900 Birch Lake shares on a flow-through basis at a price of $0.14 per share.
The changes to the terms of the Birch Lake financing will not have any impact on the terms of the previously announced plan of arrangement whereby Birch Lake will acquire all of the issued and outstanding common shares of Veraz on the basis of 0.112100125 of a Birch Lake share for each Veraz share. However, as a result of the increase in the number of Birch Lake shares that may be issued pursuant to the Birch Lake financing and the reduction in the offer price, Veraz shareholders may experience additional dilution pursuant to the agreement.
Under the old Birch Lake financing terms, there would have been approximately 73,417,467 Birch Lake shares outstanding following the arrangement and the closing of a fully subscribed Birch Lake financing, of which former Veraz shareholders would have held approximately 8.2%. Under the new Birch Lake financing terms, there will be approximately 76,274,551 Birch Lake shares outstanding following the arrangement and the closing of a fully subscribed Birch Lake financing, of which former Veraz shareholders will hold approximately 7.9%.
The arrangement agreement dated November 21, 2012, between Veraz and Birch Lake has been amended by way of a consent and waiver document to reflect the changes to the Birch Lake financing.
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