Divestco Inc.

Divestco Inc.

May 04, 2011 17:00 ET

Divestco Reports Closing of Subordinate Financing

CALGARY, ALBERTA--(Marketwire - May 4, 2011) - Divestco Inc. (TSX VENTURE:DVT) ("Divestco" or the "Company") is pleased to announced is has successfully closed a $5 million subordinate bridge financing with Toscana Capital Corporation ("TCC").

The facility will assist Divestco in bridging its 2011 capital expenditures and working capital requirements. The facility is interest only with no principal repayment until January 2012, upon which $150,000 monthly principal payments commence. The facility is subject to the Company meeting certain debt covenants and bears an interest rate of 12% with all amounts not fully drawn by May 31, 2011 being cancelled. The facility has a maturity date of April 30, 2013 with a balloon payment of $2.6 million due upon maturity. As a TCC condition precedent of the financing was participation in the facility by Divestco insiders of no less than $2 million, the facility was approved by the independent members of the Board of Directors.

In Q4 2010, Divestco commenced rebuilding its seismic data library by completing a 65 square kilometer 3D seismic survey in Q1 2011. The Company also signed an agreement in Q4 2010 whereby in exchange for a license to Divestco owned data, it obtained the trading rights to an existing 3D survey covering an adjacent area of 67 square kilometers in Q1 2011.

Mr. Stephen Popadynetz, Chief Executive Officer and President: "We have now successfully restructured Divestco, and the bridge financing is part of the recapitalization plan of the Company as we expect to return to profitability in 2011. We are back in the seismic database business, and as we capture many new and exciting seismic opportunities we have begun the process of building another world class database. In addition, we are continuing to grow a significant software, services and data business organically and we are looking at acquisition opportunities. Divestco looks very similar to the business we had in 2003, only our starting point is an entity five times the size with much more scale and breadth. While the economic outlook is still facing some challenges, we the Management and Board of Directors are enthusiastically looking forward to the upcoming opportunities for Divestco in the near to medium term."

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".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchanges) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Divestco Inc.
    Mr. Stephen Popadynetz
    Chief Executive Officer

    Divestco Inc.
    Mr. Roderick Chisholm
    Chief Financial Officer