Mixed emotions on this one, also earnings released today,Scott
Canadian Company Press Release
BDX 1998-04-30 (provided courtesy of Canadian Corporate News.)
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Big Bear Announces Special Acquisition Warrant Financing of up to $200 Million
CALGARY, ALBERTA--
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Big Bear Exploration Ltd. ("Big Bear") announced today that it has
entered into an equity funding arrangement with Belco Oil & Gas
Corp., ("Belco") whereby Belco will subscribe for $15 million of
5 percent convertible redeemable voting preferred shares at $1.20
per share and up to $172 million of special acquisition warrants
at a price of $1.016 per warrant. In addition Belco will have an
option for a period of 135 days to purchase a further $15 million,
5 percent convertible redeemable voting preferred shares at $1.20
per share. Each special acquisition warrant is exercisable into
one common share of Big Bear. The proceeds of the special
acquisition warrants will be used to fund acquisitions by Big Bear
which are acceptable to Belco. Big Bear has also given notice of
a proposed private placement of an additional 13 million special
warrants at a price of $1.016 per warrant.
Belco is an independent U.S. energy company that trades on the
NYSE under the symbol "BOG". Belco has a current market
capitalization of common and preferred stock aggregating
approximately CDN $ 900 million.
The issuance of the convertible preferred shares will be closed
promptly following approval of the transactions at Big Bear's
special shareholders' meeting to be held on June 9, 1998. The
proceeds will initially be applied to the reduction of Big Bear's
bank indebtedness.
The completion of these transactions is subject to obtaining
approval from the Big Bear's shareholders and from The Toronto
Stock Exchange on terms satisfactory to Big Bear and Belco.
The issuance of special acquisition warrants will also be closed
following shareholder approval at which time an irrevocable letter
of credit in the principal amount of $ 86.26 million and Belco
common shares valued at $86.26 million will be deposited with a
bank as escrow agent. The proceeds will only be released to Big
Bear at the time of the completion of acquisition transactions
developed by Big Bear and approved by Belco and will be used by
Big Bear to fund the acquisition price of such acquisitions and
retirement of assumed indebtedness. There can be no assurance
that any such acquisiton transaction will occur.
While the executive management of Big Bear will remain unchanged
as a result of Belco's subscription, four of Belco's nominees will
join Big Bear's board of directors, which will be comprised of 8
directors.
Jeff Tonken, the Chief Executive Officer of Big Bear, stated:
"This equity funding arrangement with Belco provides Big Bear with
a strong platform from which we can aggressively grow through
strategic acquisitions. It is my view that industry factors such
as continuing low crude oil prices, lower than expected cash
flows, increased industry debt, shrinking capital expenditure
programs and substantially weakened equity markets have created a
unique situation where Big Bear, with significant cash in hand,
may be able to successfully complete a number of acquisitions at
very attractive prices. This access to equity capital should
provide Big Bear's shareholders with the opportunity for
significant returns and upside potential."
Griffiths McBurney & Partners and Peters and Co. acted as
financial advisers to Big Bear in connection with these
transactions.
On April 28, 1998, the shares of Big Bear commenced trading on The
Toronto Stock Exchange.
On March 27, 1998, Big Bear filed a final prospectus to qualify
for distribution 8,462,000 common shares that were issued upon the
exercise of an equal number of special warrants that were issued
in January 1998. After giving effect to that issue, Big Bear
currently has 38,488,719 common shares outstanding.
Big Bear Exploration Ltd. is a Calgary based oil and gas company
listed on The Toronto and Alberta Stock Exchanges under the symbol
"BDX".
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FOR FURTHER INFORMATION PLEASE CONTACT:
Big Bear Exploration Ltd.
A. Jeffery Tonken
Chairman & C.E.O.
(403) 261-6410
or
Big Bear Exploration Ltd.
Jim Surbey
Senior Vice-President, Corporate Development
(403) 261-6416
Neither the Toronto Stock Exchange nor the Alberta Stock Exchange
has approved or disapproved the contents of this news release.
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