Kaiser-Francis Oil Company

December 21, 2007 15:18 ET

Kaiser-Francis Oil Company Acquired Units of North American Palladium Ltd.

TULSA, OKLAHOMA--(Marketwire - Dec. 21, 2007) - Kaiser-Francis Oil Company ("KFOC") announced that it participated in a public offering (the "Offering") of units (the "Units") of North American Palladium Ltd. ("NAPL") that closed on December 13, 2007 and acquired ownership of 4,666,667 Units at US$4 per Unit (the "Offering Price"). Each Unit consists of one common share (a "Common Share") and one-half of one common share purchase warrant (a "New Warrant") of NAPL. Each New Warrant entitles KFOC to purchase one Common Share at a price of US$5.05 per share at any time on or prior to December 13, 2009. In addition, KFOC has a pre-existing right to purchase (the "Purchase Right") up to 700,000 additional Units (the "Additional Units") at the Offering Price in the event that the underwriters of the Offering fully exercise the underwriters' over-allotment option granted under the Offering (the "Underwriters' Over-allotment Option") to purchase up to 2,100,000 Units prior to January 11, 2008.

As a result of the Offering, KFOC acquired an additional 9.50% of the issued and outstanding Common Shares, calculated on a partially diluted basis assuming the full exercise of the Underwriters' Over-allotment Option and the full exercise of the Purchase Right by KFOC to acquire the Additional Units, and the full conversion by KFOC of the Notes (as described below) and the exercise by KFOC of all of the Warrants (as described below).

Immediately following the Offering, KFOC owned 32,609,657 Common Shares. In addition, KFOC held a series I convertible note, the remaining outstanding principal amount of which is US$7,777,777 (the "Series I Note"), a series II convertible note, the remaining outstanding principal amount of which is US$9,000,000 (the "Series II Note") (the Series I Note and the Series II Note, collectively, the "Notes"), 718,391 series I common share purchase warrants (the "Series I Warrants"), 554,187 series II common share purchase warrants (the "Series II Warrants") and 2,333,333 New Warrants (the Series I Warrants, Series II Warrants and the New Warrants, collectively, the "Warrants") and has the Purchase Right.

As a result of the Offering, the conversion price of each of the Series I Note and Series II Note decreased from US$12.18 to US$9.12 and from US$12.18 to US$6.67, respectively. The remaining outstanding principal amount of the Series I Note is convertible into approximately 852,826 Common Shares based on the new conversion price of US$9.12. The remaining outstanding principal amount of the Series II Note is convertible into approximately 1,349,325 Common Shares based on the new conversion price of US$6.67.

The exercise price of each of the Series I Warrants and Series II Warrants also decreased from US$13.48 to US$10.73 and from US$13.48 to US$7.85, respectively. Each Warrant is exercisable into one Common Share.

Immediately following the Offering, assuming the full exercise of the Underwriters' Overallotment Option and the full exercise of the Purchase Right by KFOC to acquire the Additional Units, and the full conversion by KFOC of the Notes and the exercise by KFOC of all of the Warrants (including the New Warrants in the Additional Units), KFOC's securityholding percentage in respect of Common Shares would be approximately 46.58% of the issued and outstanding Common Shares, calculated on a partially diluted basis, based on the assumptions noted above.

KFOC acquired the Units for investment purposes and it may, depending on market and other conditions, increase its beneficial ownership, control or direction over Common Shares or other securities of NAPL, through market transactions, private agreements, treasury issuances or otherwise.

KFOC is a wholly-owned subsidiary of GBK Corporation, which in turn is controlled by Mr. George B. Kaiser and members of his family. GBK Corporation and Mr. George B. Kaiser may be presumed to be joint actors with KFOC.

Contact Information

  • Kaiser-Francis Oil Company
    Steve Walton
    (918) 583-9920