December 09, 2009 10:04 ET

Colonia Energy Corp Announces Closing of Bought Deal Financing

CALGARY, ALBERTA--(Marketwire – Dec. 9, 2009) -


Colonia Energy Corp. ("Colonia" or the "Company") (TSX VENTURE:CLA) is pleased to announce that it has completed its previously announced bought deal financing for gross proceeds of $35 million.

Pursuant to the bought deal financing, Colonia, through a syndicate of underwriters co-led by GMP Securities L.P. and Peters & Co. Limited and including Genuity Capital Markets, Macquarie Capital Markets Canada Ltd., Acumen Capital Finance Partners Limited, CIBC World Markets Inc., Dundee Securities Corporation and Paradigm Capital Inc. (collectively the "Underwriters") issued 175,000,000 subscription receipts ("Subscription Receipts") at a price of $0.20 per Subscription Receipt. The gross proceeds of the financing (the "Escrowed Funds") have been deposited with Olympia Trust Company as escrow agent pending the completion by Colonia of its previously announced acquisition (the "Private Company Acquisition") of Duce Oil Ltd. ("Duce"). Upon closing of the Private Company Acquisition, each holder of a Subscription Receipt shall receive one common share of Colonia ("Common Share") without any further action or payment of any additional funds and the Escrowed Funds shall be released to Colonia. If the Private Company Acquisition is not completed by January 20, 2010, holders of Subscription Receipts shall be refunded their pro rata portion of the Escrowed Funds and the Subscription Receipts shall be cancelled. The Subscription Receipts and any Common Shares issuable pursuant to the Subscription Receipts will be subject to a four-month hold period expiring April 10, 2010. The Underwriters received a cash fee equal to 6% of the gross proceeds raised under the financing.

In addition, Colonia has, through an arrangement with Duce, closed a separate non-brokered private placement of subscription receipts of Duce for gross proceeds of $2 million. Pursuant to the arrangement, Duce has issued 10,000,000 subscription receipts ("Duce Receipts") at a price of $0.20 per subscription receipt to facilitate a subscription that could not be made pursuant to the Colonia bought deal financing. The Duce Receipts have the same conversion conditions as the Subscription Receipts such that, upon completion of the Private Company Acquisition, the holder will be entitled to receive 10,000,000 Common Shares of Colonia and the subscription funds for the Duce Receipts will then be released to Colonia. The issuance and listing of the Common Shares issuable pursuant to the Duce Receipts are subject to approval from the TSX Venture Exchange (the "Exchange") and such Common Shares will also be subject to a four-month hold period expiring April 10, 2010. 

Note Regarding Forward Looking Statements

This document contains forward-looking statements. More particularly, this document contains statements concerning the release from escrow of proceeds realized from the financings described above and closing of the Private Company Acquisition.

Although Colonia believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Colonia can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties.

The forward-looking statements contained in this press release are made as of the date hereof and Colonia undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Colonia Energy Corp.
    Michael Erickson
    President & CEO
    (403) 355-8922
    Colonia Energy Corp.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376
    Colonia Energy Corp.
    Suite 725, 435 - 4th Avenue S.W.
    Calgary, AB T2P 3A8