PetroMaroc Announces Amendments to Secured Debentures

/EINPresswire.com/ -- TORONTO, ONTARIO--(Marketwired - Nov 9, 2016) - PetroMaroc Corporation plc (TSX VENTURE:PMA), an independent oil and gas company focused on Morocco (the "Company" or "PetroMaroc"), announces that it has entered into a binding letter of intent (the "Letter of Intent") with its secured debenture holders (the "Debentureholders").

The Letter of Intent contemplates, subject to:

1. completion of the sale and purchase agreement dated March 8, 2016, as amended, between the Company, Sound Energy South Morocco Limited and Sound Energy (the "Sale and Purchase Agreement"); and
   
   
2. receipt of necessary approvals from the TSX Venture Exchange (the "TSXV"); and
   
   
3. approval of the shareholders of the Company (the "Transaction");
   
   

that the existing Cdn $11.09 million principal amount of secured debentures (the "Debentures") of the Company, which are currently due December 31, 2016 (the "Original Maturity Date") will be rolled into a new class of secured, redeemable, debentures, issuable in series (the "New Debentures"), with all principal and interest due and payable in full on January 31, 2018 (the "New Maturity Date").

The Company shall have the right to redeem the amounts owing under the New Debentures at any time without penalty or bonus. The New Debentures will be secured by a security interest in the Company's present and after acquired property and shall rank pari passu with one other. The Company will be required to repay the accrued interest and fees owing under the Debentures up to December 31, 2016 in the amount of approximately Cdn $4.4 million within 45 days after the Original Maturity Date.

The Debentureholders will have the right to elect to receive, in exchange for their existing Debentures, either:

1. a Series 1 New Debenture, bearing interest at the rate of 10% per annum and convertible, at the option of the holder, into ordinary shares of the Company at a conversion price equal to $0.06 per share in the first 12 months of the term (January 1, 2017 to December 31, 2017) and $0.10 per share in the last month of the term (January 1, 2018 to January 31, 2018). If the Company wishes to redeem the Series 1 New Debentures, it must provide notice to the holder to allow for such debentures to be converted, at the option of the holder, before redemption; or
   
   
2. a Series 2 New Debenture, bearing interest at the rate of 15% per annum, with no right to convert into ordinary shares of the Company.
   
   

The Debentureholders shall have the right to receive, in exchange for the principal amount owing under the Debentures as at December 31, 2016, Series 1 New Debentures or Series 2 New Debentures or any combination thereof, in such proportion as they may determine.

In the event that requisite shareholder approval is not obtained, the Transaction will not proceed and the Debentureholders will have the right, on the Original Maturity Date, to declare the Cdn$11.09 million principal amount and all accrued interest on the Debentures immediately due and payable and to begin proceedings to realize upon the security held in connection with the Debentures. The Debentures are secured by a security interest in the Company's present and after acquired property.

The Company will prepare proxy materials to obtain shareholder approval of the Transaction, in accordance with the requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), at its annual and special meeting scheduled to be held on December 19, 2016 in Toronto. At the meeting, the Company will seek approval by a majority of the shareholders (excluding votes held by the Debentureholders) to approve the issuance of the New Debentures and the creation of a new Control Person (as defined in the Policies of the TSXV) as a result of the Transaction.

Pursuant to MI 61-101, the Transaction constitutes a Related Party Transaction (as defined in MI61-101) as Intrexa Ltd. ("Intrexa"), one of the four Debentureholders, currently holds 15,403,790 Shares, representing 14.79% of the issued and outstanding Shares of the Company, and therefore, is considered an Insider (as defined by the policies of the TSXV) of PetroMaroc. The Company is exempt from the formal valuation requirement of the Transaction under MI 61-101 in reliance on section 5.5(b) of MI 61-101, as no securities of the Company are listed or quoted for trading on a stock exchange listed therein.

For terms of the Sale and Purchase Agreement, please refer to the Company's press releases dated March 10, 2016 and September 23, 2016 available on SEDAR at www.sedar.com under the Company's profile.

About PetroMaroc

PetroMaroc is an independent oil and gas company focused on its significant land position in Morocco. The Company has a 50 percent operated interest in the Sidi Moktar licence area covering 2,683 square kilometres and is working closely with Morocco's National Office of Hydrocarbons and Mines (ONHYM) as a committed long‐term partner to unlock the hydrocarbon potential of the region. Morocco offers a politically stable environment to work within and has favourable fiscal terms to energy producers. PetroMaroc is a public company listed on the TSX Venture Exchange under the symbol "PMA".

Special Note Regarding Forward Looking Statements

This press release contains forward-looking statements. Such forward-looking statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "project", "potential", "targeting", "intend", "could", "might", "continue" or the negative of these terms or other similar terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the ability of the Company to: i) successfully complete the Sale and Purchase Agreement with Sound Energy, including satisfying all conditions precedent and obtaining receipt of Ministerial approvals in Morocco and the final approval of the TSXV; ii) to repay the accrued interest and fees owing under the Debentures up to the Original Maturity Date within the time period required therefore; and iii) approval of the Transaction (including creation of a new Control Person) by the TSXV and the shareholders of the Company.

Forward-looking statements are only predictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: general economic conditions in Canada, the Kingdom of Morocco and globally; industry conditions, including fluctuations in the price of oil and gas, governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; risks inherent in oil and gas operations; political risk, including obtaining requisite governmental approvals in Morocco; geological, technical, drilling and processing problems; unanticipated operating events which could cause commencement of drilling and production to be delayed; the need to obtain consents and approvals from industry partners, regulatory authorities and other third-parties; stock market volatility and market valuations; competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions or resource estimates; any future inability to obtain additional funding, when required, on acceptable terms or at all; credit risk; changes in legislation; any unanticipated disputes or deficiencies related to title matters; dependence on management and key personnel; risks associated with operating in and being part of a joint venture; the Company's ability to successfully close the Sale and Purchase Agreement and to repay the accrued interest owing up to the Original Maturity Date within the time period required therefore and to receive the TSXV's and shareholders' approval of the Transaction.

Although the forward-looking statements contained in this press release are based upon factors and assumptions which management of the Company believes to be reasonable, the Company cannot assure that actual results will be consistent with its expectations and assumptions. Undue reliance should not be placed on the forward-looking statements contained in this news release as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements speak only as of the date of this press release, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.

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

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of PetroMaroc in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.