Olisol Petroleum Limited

April 19, 2016 17:00 ET

Early Warning Report Regarding Acquisition of Shares of Tethys Petroleum Limited by Olisol Petroleum Limited

NICOSIA, CYPRUS--(Marketwired - April 19, 2016) - Olisol Petroleum Limited ("Olisol") announces that, on April 15, 2015, it acquired ownership and control of 25,604,419 ordinary shares ("Shares") of Tethys Petroleum Limited ("Tethys").

Olisol currently owns an aggregate of 63,044,461 Shares, representing approximately 15.8% of the issued and outstanding Shares.

On November 19, 2015, Tethys Petroleum Limited ("Tethys") and Olisol entered into a facility agreement (the "Original Facility Agreement") pursuant to which Olisol agreed to provide a U.S. dollar denominated credit facility to Tethys. On March 2, 2016, Tethys, Olisol and OIL entered into an amendment agreement (the "Amendment Agreement") pursuant to which, among other things, the parties agreed to amend certain terms of the Original Facility Agreement (such amended Original Facility Agreement is referred to herein as the "Facility Agreement").

Pursuant to the terms of the Facility Agreement, Olisol has the right to convert amounts outstanding under the Facility Agreement ("Outstanding Indebtedness") into ordinary shares in the capital of Tethys ("Shares") subject to certain limitations. In particular, Olisol agreed that:

  1. until such time as the approval of the Toronto Stock Exchange ("TSX") of the personal information forms ("PIFs") submitted to the TSX on behalf of the principals of Olisol was obtained, Olisol would not be entitled to exercise any right of conversion that would result in Olisol and its affiliates holding 10% or more of the then issued and outstanding Shares (after giving effect to such conversion; and
  2. Olisol is not entitled to exercise any right of conversion that would result in Olisol and its affiliates together holding 20% or more of the then issued and outstanding Shares (after giving effect to such conversion) until such time as the approval of Tethys's shareholders had been obtained if and to the extent required by the TSX.

On March 18, 2016, Olisol delivered a conversion notice (the "Conversion Notice") under the Facility Agreement to Tethys regarding the conversion of US$6,304,446 (the "Aggregate Conversion Amount") into Shares at a price of US$0.10 per Share. On March 21, 2016, Olisol was issued 37,440,042 Shares (the "Pre-PIF Shares"), being the maximum number of Shares Olisol could receive in light of the restriction noted at (a) above.

The PIFs were approved by the TSX on April 15, 2016 and as such, on April 15, 2016, the remaining US$2,560,441.90 of the Aggregate Conversion Amount was converted into 25,604,419 Shares (the "Conversion"). These additional Shares, when combined with the Pre-PIF Shares, resulted in Olisol acquiring ownership of an aggregate of 63,044,461 Shares, representing approximately 15.8% of the issued and outstanding Shares at the time of the Conversion.

The Shares were acquired by Olisol as a result of the conversion of a portion of the Outstanding Indebtedness at a conversion price of US$0.10 per Share, for an aggregate conversion price of US$6,304,446, all in accordance with the terms of the Facility Agreement. The Bank of Canada closing exchange rate on the date of the Conversion was CDN$1.2837 per United States dollar, resulting in an aggregate conversion price expressed in Canadian dollars of CDN$8,093,017.33.

The Facility Agreement and the Amendment Agreement were entered into, and the Shares were acquired by Olisol, in connection with a larger investment transaction in respect of which Olisol, OIL and Tethys continue to negotiate an amended and restated investment agreement (the "Investment Agreement"). Certain elements of the Investment Agreement are set out in the Amendment Agreement including the following:

  1. Olisol will purchase an additional 181,240,793 Shares at a price to be negotiated by Tethys and Olisol. This additional purchase, together with the Conversion, would result in Olisol owning approximately 42% of the enlarged undiluted share capital of Tethys; and
  2. the board of directors of Tethys will be reconstituted to include:
    1. Adeola Ogunsemi, a non-executive director and Chairman of the Audit Committee;
    2. William Paul Wells, a non-executive director;
    3. Alexander Abramov, a non-executive director;
    4. one additional non-executive independent director designated by Olisol; and
    5. the one remaining board seat will be filled by a candidate who satisfies the legal and regulatory requirements of Tethys and whose appointment is agreed by Tethys and Olisol.

A copy of the related early warning report (the "Report") to be filed with the applicable securities commissions may be obtained from the SEDAR website (www.sedar.com) under the profile for Tethys.

For further information or to obtain a copy of the Report, please contact Olisol as follows:

Contact Information

  • Olisol Petroleum Limited
    c/o Olisol Investments Limited
    Stasinoul, Mitsi Building 1
    1st Floor, Flat/Office 4
    Eleftherias, P.C. 1060
    Nicosia, Cyprus

    Attention: Kenneth J. May
    1-501-680-5463
    E-mail: info@olisol.ch