Primeline Energy Holdings Inc.
TSX VENTURE : PEH

Primeline Energy Holdings Inc.

June 05, 2015 10:56 ET

Primeline Signs Binding Agreement for US$20m of Convertible Bonds to Fund Exploration Programme

HONG KONG, CHINA--(Marketwired - June 5, 2015) -

NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRES SERVICES, OR DISSEMINATION IN THE UNITED STATES.

Primeline Energy Holdings Inc. ("Primeline" or the "Company") (TSX VENTURE:PEH) today announces that it has signed a binding subscription agreement with GEMS for the issue of US$20 million of convertible bonds to provide funds for the forthcoming exciting exploration programme in Block 33/07.

In May 2015, the Company entered into a non-binding term sheet with GEMS, a Hong Kong based manager of private equity funds, under which a resources fund managed by GEMS, is to purchase a principal amount of US$20 million of unsecured Convertible Bonds to be issued by the Company (the "Bonds"). Subsequently, the documentation relating to the proposed Bonds has been negotiated, investment in the Bonds has been approved by GEMS' investment committee and the subscription agreement has been signed by both parties on the 5th June 2015 on the agreed terms as announced on 11th May 2015. The Bonds are to be issued in two tranches (tranche A and B), each being US$10 million. The long stop dates for drawdown of the tranche A Bonds and B Bonds are 31st July 2015 and 31st December 2015 respectively, although all parties are working with a view to draw down ahead of those dates.

The closing and drawdown of the Bonds will be subject to various conditions precedent which include the consent of Primeline's lending syndicate of banks led by China Development Bank and China Export-Import Bank and the completion of the proposed acquisition of Primeline Petroleum Corporation ("PPC") by the Company from Primeline's Chairman, President and majority shareholder, Mr. Victor Hwang. Primeline expects the consent of the banks shortly. The acquisition of PPC requires shareholder approval at an Extraordinary General Meeting which is scheduled for 23rd July 2015. A further announcement will be made on the progress of the acquisition of PPC, consents and Bond closure. The Company expects to publish further details on the proposed Block 33/07 exploration programme in due course.

About Primeline Energy Holdings Inc.

Primeline is an exploration and production company focusing exclusively on China natural resources to become a major supplier of gas and oil to the East China market. Primeline has a 75% Contractor's interest in (PPC 25%), and is the operator of, the petroleum contract with CNOOC for Block 33/07 (5,877sq km) and a 36.75% interest in the producing LS36-1 gas field in Block 25/34, together with CNOOC Limited (51% interest and acting as Operator for the field development and production) and PPC (12.25% interest). Both blocks are located in the East China Sea. LS36-1 gas field has been in production since July 2014. Shares of Primeline are listed for trading on the TSX Venture Exchange under the symbol PEH.

About GEMS

GEMS was founded in 1998 as an independent investment company whose sole business is the management of private equity funds. Asia has always been the core focus for GEMS with a strong and experienced team having spent the majority of their working lives in the region. As a result, GEMS has extensive networks and relationships across the region. The team is made up of a diverse mix of individuals with relevant experience in both direct investment and industry. Oil and gas investment is central to GEMS pure resources focused strategy. GEMS endeavours to work closely with partners with the objective of creating long term, sustainable value through its investments.

ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC.

Ming Wang, Chief Executive Officer

Please visit the Company's website at www.pehi.com. Should you wish to receive Company news via email, please email robin@chfir.com and specify "Primeline Energy" in the subject line.

Forward-Looking Statements

Some of the statements in this news release contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Primeline. These statements relate to Primeline's expectation that it will satisfy the conditions precedent to the issue of the Bonds, including the consent of its lending syndicate and that it will obtain the consent of disinterested shareholders for the acquisition of PPC. Although these statements are based on assumptions management believes to be reasonable, actual results may vary from those anticipated in such statements. Primeline may be unable to satisfy other conditions precedent to the issue of the Bonds. Regulatory and shareholder approvals may not be received for all or some of the transactions. If Primeline is unable to complete the transactions, it may have to curtail or cease its operations. Exploration for oil and gas is subject to the inherent risk that it will not result in a commercial discovery.

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 release.

Contact Information

  • Primeline Energy Holdings Inc.
    Dr. Ming Wang
    CEO
    +44 207.499.8888 or Toll Free: 1.877.818.0688
    +44 207.499.2288 (FAX)
    IR@pehi.com

    CHF Investor Relations
    Robin Cook
    Senior Account Manager
    +1 416.868.1079 ext. 228
    +1 416.868.6198 (FAX)
    robin@chfir.com