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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (14492)	12/23/1998 4:15:00 PM
From: Kerm Yerman	Read Replies (18) \| Respond to of 15196

CORP NOTICE / Mercantile directors announce resignations and that a receiver will be appointed citing ex-parte order from Cayman Islands court GRAND CAYMAN, Cayman Islands, Dec. 23 /CNW/ - Mercantile International Petroleum Inc. (''Mercantile'') announced today that its Chairman, John Arthur Bray and two of its directors, Cameron O. Smith and Roger M. Widmann have tendered their resignations as Chairman and directors of the Company effective immediately. Prior to the resignations, the Board of Directors passed a resolution authorizing the Company not to oppose the appointment of a receiver in response to a writ of summons and an application submitted by Jeffrey Waterous, plaintiff, to the Grand Court of the Cayman Islands. The plaintiff's claim was for, among other things, the appointment of a receiver and manager over the undertakings and assets of the Company until an extraordinary general meeting of the Company can be convened for the purpose of reconstituting the Board of Directors. Mr. Waterous, who is the sole remaining director of the Company, was asked by the Board of Directors in July of this year to step-down as Chairman of the Board of Mercantile and the Board subsequently appointed Mr. Bray as Chairman in addition to his duties as CEO. The action taken by the Board of Directors and the subsequent resignations of the three directors is in response to an ex-parte order granted on December 18, 1998 in the Grand Court of the Cayman Islands which, among other things, orders that the Defendants (Mercantile, and Mssrs. Bray, Smith and Widmann) take all steps to cause an Extraordinary General Meeting of the shareholders to be convened at 9:30 a.m. on the 30th day of December 1998 at the Company's head office with an agenda item for the reconstitution of the Board of Directors. The plaintiff is to provide an alternative slate of directors. The Company and the Board of Directors have been advised by its counsel that to comply with the ex-parte order as directed, would contravene a number of securities and stock exchange regulations. The Company is a reporting issuer in Ontario and its common shares were recently suspended by The Toronto Stock Exchange for failing to meet the continuous listing requirements of the exchange. The common shares of the Company have traded in the range of one to three cents for the past several weeks and the Company announced on November 30, 1998 the suspension of repayment of certain of its debt obligations. The Company, which has approximately US$46 million in debt, failed to make a US$1 million payment that was due on October 30, 1998 to the vendors of Rio Bravo S.A. and also failed to pay a US$2.3 million semi-annual interest payment due on December 2, 1998 to holders of its US$40 million, 11.5% debentures. Management of the Company has been in discussions with holders of the debentures for the purpose of gaining support for a capital restructuring plan and, to date, holders of over 50% of the debentures had informally provided their support to management in its restructuring efforts. The outcome of these discussions in view of recent developments is unknown. Mercantile is an ''oil and gas exploitation company'' with interests in Peru, Colombia and Myanmar.