CALGARY, ALBERTA--(Marketwire - Sept. 17, 2012) -
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DIVESTCO INC. (TSX VENTURE:DVT) ("Divestco" or the "Corporation"), is pleased to announce the first closing of its secured subordinated debenture offering in the amount of $1,210,000 (the "Debentures") with a royalty interest (the "Royalty Interest"). The Company's directors subscribed for $1,100,000. The Debentures bear interest at 8.00% per annum, payable quarterly on the outstanding principal. Principal payments will equal 50% of the net revenues generated by the Seismic Data on or after July 1, 2012 (the "Principal Payments") with the balance of the revenue to be retained by the Company. Net revenues will equal 90% of the gross revenues generated by the Seismic Data as the Corporation will retain 10% of the gross revenues as a management fee. The Seismic Data is comprised of the seismic surveys acquired by Corporation as of July 1, 2012. Principal Payments may be postponed if the Corporation is in breach of any of its senior debt covenants. The Corporation intends to use these initial proceeds for working capital purposes. A subsequent closing will include conversion of the Company's shareholder loans and a portion of its subordinated loan into Debentures totaling $2.8 million, currently held by two directors. Additional closings may be held at the option of the Corporation.
Upon full repayment of the principal amount of the Debentures and all accrued interest, the Royalty Interest will become effective whereby 25% of the net revenues generated by the Seismic Data, commencing after the last Principal Payment has been made, will be paid as a royalty indefinitely (the "Royalty Payments") with the balance of the revenue to be retained by the Company. Net revenues will equal 90% of the gross revenues generated by the Seismic Data as the Corporation will retain 10% of the gross revenues as a management fee. Royalty Payments may be postponed if the Corporation is in breach of any of its senior debt covenants.
The principal amount of the Debentures and accrued interest, but not the Royalty Interest, is secured against the Seismic Data by way of a registered security interest pursuant to the Personal Property Security Act (Alberta) but is subordinated to the Corporation's existing senior debt and will be subordinated to any future senior debt.
About Divestco Inc.
Divestco is an exploration services company that provides a comprehensive and integrated portfolio of data, software, and services to the oil and gas industry. Through continued commitment to align and bundle products and services to generate value for customers, Divestco is creating an unparalleled set of integrated solutions and unique benefits for the marketplace. Divestco's breadth of data, software and services offers customers the ability to access and analyze the information required to make business decisions and to optimize their success in the upstream oil and gas industry. Divestco is headquartered in Calgary, Alberta, Canada and trades on the TSX Venture Exchange under the symbol "DVT".
This press release contains forward-looking information related to the Company's capital expenditures, projected growth, view and outlook towards future oil and gas prices and market conditions, and demand for its products and services. Statements that contain words such as "could', "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning applicable by Canadian securities legislation. Although management of the Company believes that the expectations reflected in such forward-looking information are reasonable, there can be no assurance that such expectations will prove to have been correct because, should one or more of the risks materialize, or should the assumptions underlying forward-looking statements or forward-looking information prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Readers should not place undue reliance on forward-looking statements or forward-looking information. All of the forward-looking statements and forward-looking information of the Company contained in this press release are expressly qualified, in their entirety, by this cautionary statement. Except where required by law, the Company does not assume any obligation to update these forward-looking statements or forward-looking information if conditions or opinions should change.
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 news release.