Americas Petrogas Inc. has entered into settlement agreements with certain dissenting shareholders holding 22,523,667 common shares in the capital of the Company. The consideration to be paid for the Dissented Shares will be issued in settlement of statutory rights of dissent exercised by Dissenting Shareholders in connection with the sale by the Company of all of the issued and outstanding common shares of Americas Petrogas Argentina S.A. (APASA) to Tecpetrol International S.A. and Tecpetrol Internacional S.L.
Under the terms of the settlement, the Dissenting Shareholders will receive $0.295 in cash and 0.22 common shares of Americas Petrogas (the "Settlement Shares") for each Dissented Share held. The cash consideration for the Dissented Shares will be paid out of the Company's existing working capital of $66.3 million ($0.286 per common share) as of September 30, 2015. The Settlement Shares are being issued at a deemed price of $0.25 per share. The combined consideration for the Dissented Shares (cash and Settlement Shares) is $0.35 per Dissented Share. The aggregate consideration for all Dissented Shares is $6,644,481.77 in cash and 4,955,206 in Settlement Shares. After cancellation of the Dissented Shares and issuance of the Settlement Shares, Americas Petrogas will have reduced its number of common shares outstanding to 216,170,645. The payment of the cash settlement amount and the issuance of the Settlement Shares is subject to receipt of final documentation from the Dissenting Shareholders and the approval of the TSX Venture Exchange.
Extensions and Relinquishments
The Company also announces that it has obtained an extension of its commitments for the Totoral block (90% operated interest and 10% is held by Gas y Petroleo del Neuquen) to December 2017. The Company has elected to relinquish its interests in the Yerba Buena and Bajada Colorada blocks. The Company's financial commitment relating to the Totoral block is estimated to be US$5.5 million.
As well, APASA, now owned by Tecpetrol, has obtained an extension of the commitments associated with the Loma Ranqueles block to June 2017. APASA, the operator, holds a 65% working interest in Loma Ranqueles while the Company holds a 25% working interest. The remaining 10% is held by Gas y Petroleo del Neuquen. The Company's remaining share of financial commitment relating to Loma Ranqueles is estimated to be US$3.7 million.
Abby Badwi, the Executive Chairman of the Company, commented, "I believe that reaching this amicable and timely resolution with the Dissenting Shareholders is in the best interests of Americas Petrogas and its shareholders and will allow management to focus its activities on growing the business and maximizing shareholder value. I am also pleased that we have been able to defer our commitment obligations for Totoral and Loma Ranqueles until 2017, which will provide us the opportunity to further evaluate the potential and plans of these blocks."
