Ceiba Energy Services Inc.
TSX VENTURE : CEB

Ceiba Energy Services Inc.

June 06, 2016 09:00 ET

Ceiba Energy Services Announces Non-Brokered Private Placement of Convertible Debentures

CALGARY, ALBERTA--(Marketwired - June 6, 2016) - Ceiba Energy Services Inc. ("Ceiba" or the "Company") (TSX VENTURE:CEB) is pleased to announce that it intends to complete a non-brokered private placement (the "Private Placement") of unsecured convertible debentures ("Debentures") for gross proceeds of up to $5,000,000. The proceeds of the Debenture issuance will be used for the development of the Company's Kaybob Class 1B waste fluid disposal facility, which is expected to be operational in late 2016, and for general corporate purposes. The Kaybob facility will add 180,000 m3/year of disposal capacity to Ceiba and is expected to generate incremental cash flow per share in 2017. Further, the Company announces its intention to repay the $7.3 million 12% convertible debentures due July 31, 2016 with cash on hand and borrowings from the Company's credit facility.

Each Debenture will have an issue price of $1,000 per Debenture, mature on June 30, 2020 and will bear interest at a rate of 9.0% per annum, payable semi-annually in arrears. The Debentures and common shares in the capital of Ceiba (the "Common Shares") issued upon conversion thereof will be subject to a four month hold period from the date of issuance of the Debentures in accordance with applicable securities laws and, if required, the policies of the TSX Venture Exchange. A cash finder's fee of 5.5% may be paid in connection with the Private Placement. The Private Placement is expected to close on or around July 5, 2016.

Each Debenture is convertible into Common Shares at the option of the holder at any time prior to redemption or maturity (as the case may be), at the price of $0.40 per Common Share (the "Conversion Price"), which is equivalent to 2,500 Common Shares for each $1,000 principal amount of Debentures, subject to adjustment in certain circumstances.

The Company may redeem the Debentures for cash on and after the second anniversary of issuance, in whole or in part, from time to time without bonus or penalty, upon required prior notice at a redemption price equal to their principal amount plus accrued and unpaid interest, if any, provided that the volume weighted average trading price of the Company's Common Shares on the TSX Venture Exchange for the 20 consecutive trading days ending five trading days preceding the date on which notice of redemption notice is given is at least 125% of the Conversion Price.

The closing of the Private Placement is subject to regulatory approval including, but not limited to, the approval of the TSX Venture Exchange.

Reader Advisory

Neither the 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 the accuracy of this release.

The securities being offered have not been, nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. federal and state registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of, or a solicitation of an offer to buy, securities in the United States.

Forward-looking statements

Certain information regarding Ceiba in this news release, including statements pertaining to the closing of the Private Placement, the Company's ability to obtain the necessary approvals and the management's expectations of the use of proceeds, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with its ability to raise capital, risks associated with obtaining the necessary approvals, risks associated with facility construction and oilfield services operations, general risks associated with oil and gas exploration, development, production, marketing and disposal of waste, loss of markets, environmental risks, competition from other service providers, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward‐looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Ceiba's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward‐looking statements or information contained in this news release are made as of the date hereof and Ceiba does not undertake any 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.

Contact Information

  • Ceiba Energy Services Inc.
    Ian Simister
    President
    403-262-2783

    Ceiba Energy Services Inc.
    Peter Cheung
    CFO and Corporate Secretary
    403-262-2783