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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Kerm Yerman who wrote (5561)	11/8/1998 3:46:00 PM
From: Ed Ajootian	Read Replies (1) of 24892

Kerm/ Benz Energy IMO the primary reason for listing on the US is that Prentis Tomlinson (Benz' president) promised the convertible debenture holders he would get this done by the time their debentures first became callable. Just a bit of backtracking is necessary to understand this. Last spring Benz was trying to do a convertible debenture financing. They first talked with their Canadian underwriter on a few earlier deals, Gordon, and Gordon dropped the ball. Then they got Dominick & Dominick involved, but D&D could only do $10 mm, in the US and Canada. So Prentis then went to a Texas boutique investment banking firm that does a lot of O&G work, RP & C (formerly Rauscher Pierce). RP & C was able to place $27.5 mm of the debentures in Europe. The terms of these securities were much better for Benz than the D&D securities, in that these bonds could be called as early as 9/30/99 vs. 9/30/01 for the other ones. If you think a lot of American investors shun the VSE, the Europeans think even less of it. So Prentis probably had to commit to getting on the US market by 9/30/99 in order to sell the bonds to the Europeans. I suspect the company is starting the process now, with 11 months still to go, because it wants to leave plenty of time for regulatory delays, etc. As we've seen with other Canadian companies (Seven Seas, etc.) it is not that easy to get on the Amex and they basically operate at their own slow pace. Ideally they would like to have Benz already trading on the Amex for several months by the time 9/30 rolls around. There are several US securities firms that are very fond of Benz and have indicated that they would initiate analyst coverage as soon as it is listed on a US exchange. The ideal scenario would be if these reports were out and in circulation by the time 9/30 is here.

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