31st Mar 2016 09:28
LONDON (Alliance News) - Greka Drilling Ltd on Thursday said it has secured a USD5 million loan from Guaranty Finance Investors LLC.
The proceeds of the loan are to be used for working capital purposes, and the interest payable is at a rate of 7% per year, repayable on March 31, 2019.
As part of the financing, Greka has issued GFI with warrants to subscribe for 35 million Greka shares at an exercise price of 5 pence each. The warrants are exercisable at any time between April 1, 2017 and March 31, 2019.
After March 31, 2017, Greka may elect to prepay the loan, provided that the amount repaid would provide GFI with a total annual return of 25%. This would then be deemed to have redeemed the warrants instead of issuing new shares.
"This loan provides comfort and flexibility for the balance sheet over what we anticipate to be a period of limited activity for the business. The company has enjoyed a long-term relationship with GFI and is pleased that this loan demonstrates their long-term belief in our business model and potential for the future," Chairman and Chief Executive Randeep Grewal said in a statement.
Shares in Greka were trading down 8.4% at 3.21 pence on Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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