Sabretooth Energy Ltd.

Sabretooth Energy Ltd.

May 27, 2009 08:22 ET

Sabretooth Energy Ltd. Announces Subscription Receipt Financing

CALGARY, ALBERTA--(Marketwire - May 27, 2009) -


Sabretooth Energy Ltd. ("Sabretooth" or the "Company") (TSX:SAB) is pleased to announce that it has entered into an agreement with a syndicate of underwriters (the "Underwriters") led by Cormark Securities Inc. pursuant to which the Underwriters have agreed to offer for sale on a private placement basis, 46.6 million subscription receipts (the "Subscription Receipts") of Sabretooth Energy Ltd. ("Sabretooth" or the "Company") at a price of $0.86 per Subscription Receipt for aggregate gross proceeds of approximately $40.1 million and to the extent the Underwriters are unable to sell all of the Subscription Receipts as agents, to purchase as principals, on an underwritten basis, that number of Subscription Receipts which together with the Subscription Receipts sold by the Underwriters as agents aggregates to 46.6 million Subscription Receipts (the "Offering"). Sabretooth has granted the Underwriters an option to offer for sale up to 6.99 million additional Subscription Receipts for a period up to 24 hours prior to closing.

Upon satisfaction of the Escrow Release Conditions (defined below), each Subscription Receipt will be convertible, for no additional consideration and without further action, to acquire one common share (a "Common Share") in the capital of the Company.

The gross proceeds of the Offering will be held in escrow and will be released to the Company upon satisfaction of the following conditions ("Escrow Release Conditions"): a) receipt by Sabretooth of all necessary shareholder approvals regarding the transactions with Cequence Energy Ltd. ("Cequence") and the Cequence team, as described in the Sabretooth press release dated May 25, 2009; and b) pricing of the previously announced Sabretooth rights offering at greater than $0.35 per share and not greater than $0.37 per share; and c) completion of the transactions contemplated by the agreement with Cequence, including the private placement of $9.44 million by the management team of Cequence; and (d) receipt by Sabretooth of shareholder approval and all regulatory approvals (including approval of the TSX) in respect of the Offering.

In the event that the Escrow Release Conditions are not satisfied at or before 5:00 p.m. (Calgary time) on August 31, 2009, the Escrowed Funds shall be returned to subscribers. Closing of the offering is anticipated to occur on or before June 18, 2009 and is subject to receipt of applicable regulatory approvals including approval of the TSX.

Subscribers for Subscription Receipts will not be entitled to participate in Sabretooth's previously announced rights offering. The Company has agreed with the Underwriters that it will use its best efforts to qualify the Common Shares issuable upon conversion of the Subscription Receipts by a short form prospectus. If such Common Shares are not free trading upon the completion of the transactions with Cequence and the Cequence team, such Common Shares will be subject to a 4 month hold period and purchasers of the Subscription Receipts will be entitled to a 10% liquidity penalty payable in Common Shares.

The proceeds of the financing will be used to fund exploration and development opportunities and for general corporate purposes.

ADVISORY: This press release contains forward looking statements which may include statements concerning the closing date of the offering and the anticipated use of the net proceeds of the offering. Although Sabretooth believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Sabretooth 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. The closing of the offering could be delayed if Sabretooth is not able to obtain the necessary shareholder, stock exchange and other regulatory approvals on the timelines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. The intended use of the net proceeds of the offering by Sabretooth might change if the board of directors of Sabretooth determines that it would be in the best interests of Sabretooth to deploy the proceeds for some other purpose.

The forward looking statements contained in this press release are made as of the date hereof and Sabretooth undertakes no obligations 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.

This news release is not for dissemination in the United States or to any United States news services. The common shares of Sabretooth have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Sabretooth Energy Ltd.
    Marshall Abbott
    Chief Executive Officer & Director
    (403) 806-4047