Candax Energy Inc.
TSX : CAX

Candax Energy Inc.

February 04, 2011 15:07 ET

Candax Closes Debt Restructuring Plan

TORONTO, ONTARIO--(Marketwire - Feb. 4, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Candax Energy Inc. ("Candax") (TSX:CAX) is pleased to announce that the Debt Restructuring Plan that was announced by the Company on December 14, 2010 with updates on December 24, 2010 and January 31, 2011 has now closed. Pursuant to the terms of the Debt Restructuring Plan, Candax has issued 464,193,161 common shares of the Company to Geofinance N.V. ("Geofinance") in consideration for the cancellation of US$22,000,000 of bank debt and US$1,005,000 in fees which amounts were originally owing under the Company's banking facility with the Bank of Scotland, assigned to Geofinance pursuant to the Debt Restructuring Plan, and the conversion of a shareholder loan in the amount of EUR 2,000,000 owing to Geofinance. The shares were issued at $0.055169288 per share, which price represents the five-day weighted average trading price of the Company's shares on the TSX, ended Thursday, February 3, 2011. The average EURCAD and USDCAD exchange rates over the same five-day period were used to determine the number of shares to be issued. The new common shares issued represent 119% of the number of common shares of the Company issued and outstanding just prior to the issuance, and as a result of this issuance, Candax now has 853,565,877 common shares outstanding of which Geofinance holds 684,304,271 representing 80.17%. 

Benoit Debray, Chairman of Candax commented:

"The closing of the Debt Restructuring Plan is a very positive step for Candax. It provides the Company with a much stronger balance sheet and significantly improved financing terms, as the first payment is due January 31, 2013 under the terms of the revised loan. Further, the additional US$10,000,000 loan facility that is being made available to Candax by Geofinance will provide the Company with the capital needed to initiate the work programs that are required on the Company's Tunisian assets to create value for all its shareholders. Candax fully expects that the benefits flowing from the Debt Restructuring Plan will assist the Company in strengthening its operations, raising new financing when needed and meeting applicable TSX listing requirements going forward."

Candax Energy Inc. is an international energy company with its head office in Toronto and offices in Tunis and Madagascar. The Candax group is engaged in exploration and the production of oil and gas and power generation in Tunisia and holds an interest in an exploration permit in Madagascar.

This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in exploration development and production at El Bibane; delays or changes in plans with respect to exploration or development projects or capital expenditures; the risk that the transactions with Geofinance under the Debt Restructuring Plan may not complete; the ability of Candax to continue to service its debt; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Candax to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Candax to fund the capital and operating expenses necessary to achieve the business objectives of Candax, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Candax. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Candax Energy Inc. should not place undue reliance on these forward-looking statements.

Contact Information

  • Candax
    Charlotte May
    Corporate Secretary
    416 364 3353
    cmay@candax.com
    or
    CHF Investor Relations
    Jeanny So
    Account Manager
    416 868 1079 ext. 225
    jeanny@chfir.com