CORPORATE NOTICE / Tornado Resources Ltd. Granted Protection From Creditors
CALGARY, Oct. 7 /CNW/ - Tornado Resources Ltd. announced today that it
has obtained an Order under the Companies' Creditors Arrangement Act (Canada)
(the ''CCAA Order''). Under the CCAA Order, Tornado was granted protection
from its creditors for an initial stay period of 30 days expiring November 5,
1998. During this period, Tornado with be preparing and filing a formal plan
of compromise or arrangement with its creditors. Tornado will apply for
additional periods as required.
Prior to obtaining the CCAA Order, Tornado restructured its management.
Stephen W. Mason, President and Chief Executive Officer of the Corporation and
a Director has resigned. A management team has assumed his responsibilities
until his replacement is hired. Mr. Mason will assist Tornado in connection
with its efforts to develop its gas-to-power project in Tanzania, Africa.
Bernard Poznanski, a Director, also resigned. Two Officers of Tornado,
Anthony E. Reinsch, Executive Vice President and Ben VanRootselaar, Vice
President Operations have agreed to join the Board of Directors.
Tornado's day to day operations, and certain obligations relating to its
oil and gas properties at Enchant, Alberta, have been funded mainly by one
investor. Approximately $1.5 million was funded and secured by an 18% secured
convertible debenture with effective dates from March 30, 1998, forward. The
debentures are due December 31, 1998, and are convertible at $0.50 per common
share. In addition, 1,071,400 share purchase warrants were issued in
connection with the debentures. Each warrant entities the holder to purchase
one common share of the Corporation for $0.50, until August 21, 2000. Tornado
is pursuing additional financing from this investor throughout the period
covered by the CCAA Order.
Tornado is an energy company with interests in Western Canada and East
Africa with its headquarters in Calgary, Alberta.
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