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Frontera reaches agreement with YA fund over financing
Oil and gas exploration and production company Frontera Resources Corporation updated the market on its corporate finance situation on Thursday.
The AIM-traded firm had announced on 18 May that, a year earlier, it had entered into agreement with YA II PN, an investment fund managed by Yorkville Advisors, whereby the entire amount of debt which had been provided to the company by YA under the previously-announced SEDA-backed loan agreement was converted into equity.
That conversion was actioned by issuing to YA 7,200 series A convertible, preferred, redeemable shares in the company, with the redemption value of $1,000 per share.
Over the 12-month period after their issuance, the Series A shares were convertible into a maximum of 1,300,000,000 ordinary shares of Frontera.
The last such conversion took place on 4 April, as announced on the same date, following which YA held the remaining 2,891 Series A shares with the redemption value of $2,891,000, which would be redeemable on 16 June 2018.
"The company and YA have now agreed that the redemption of the remaining 2,891 Series A shares will take place over 12-month period, on a monthly basis, for which the company will be making cash redemption payments to YA of $0.265m per month," Frontera's board explained.
"Once so redeemed, the Series A shares will be cancelled.
"The company has also the right to convert redeemable Series A shares into ordinary shares, at its option."
Frontera said it would also have the right to pay down in cash the entire redemption amount for the outstanding number of Series A shares at any point.
"As consideration for this agreement, the company has agreed to issue 10,000,000 new ordinary shares in the company, at market price, to YA II PN."