Washington, D.C., September 10, 2012—IFC,
a member of the World Bank Group, and the IFC African, Latin American,
and Caribbean Fund (IFC ALAC Fund), have agreed to make a $27 million equity
investment in PetroNova, Inc, to support the expansion of the company’s
oil and gas exploration program in Colombia. Increased oil and gas exploration
and production helps Colombia increase its energy supplies, boost exports,
and increase government revenues.
IFC will invest $15 million. The IFC ALAC Fund, a private equity fund managed
by IFC Asset Management Company, will invest $12 million. The equity financing
package will be used by PetroNova to fund its drilling program in the Llanos
and the Caguan-Putumayo basins.
“IFC’s investment will support PetroNova’s active exploration drilling
program,” said Mr. Antonio Vincentelli, PetroNova’s President and CEO.
“We are looking forward to working with the IFC and applying the
valuable global knowledge and experience they can provide as we progress
our drilling program.”
In addition to providing financing, IFC has been advising PetroNova on
environmental and social standards. IFC is also exploring how the company
can participate in IFC’s ongoing advisory work to enhance the use of oil
revenues by local municipalities in Colombia.
“We believe PetroNova has the leadership
and capacity to help develop Colombia’s domestic oil and gas resources—key
economic-growth sectors in the country,” said Lance Crist, IFC’s Global
Head for Oil and Gas. “This investment aligns with our strategy to support
growing junior oil and gas companies in Latin America as they work to unlock
significant national and local economic opportunities in the region.”
Sujoy Bose, Chief Investment Officer and Head of the IFC ALAC Fund, added:
“The investment provides the IFC ALAC Fund a unique opportunity to support
PetroNova’s exploration activity in Colombia and offers significant growth
potential for investors. We look forward to working with the business to
further its development."
In Colombia, IFC focuses on supporting sectors that are essential to social
and economic development, including natural resources industries, infrastructure,
health, education, agribusiness, and public-private partnerships to build
ports, roads, and airports. IFC assists leading Colombian companies in
modernizing and expanding their businesses. IFC also promotes access
to finance for micro, small, and medium enterprises, and works on improving
the investment climate by simplifying regulations and royalty management.
To learn more about IFC in Latin America and the Caribbean, visit www.ifc.org/lac.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, mobilizing capital in international financial
markets, and providing advisory services to businesses and governments.
In FY12, our investments reached an all-time high of more than $20 billion,
leveraging the power of the private sector to create jobs, spark innovation,
and tackle the world’s most pressing development challenges. For more
information, visit www.ifc.org.
About IFC Asset Management Company
IFC Asset Management Company, a wholly owned subsidiary of IFC, invests
third-party capital, enabling outside investors to benefit from IFC’s
expertise in achieving strong equity returns, as well as positive development
impact in the countries in which it invests. It manages over $4 billion
of capital across four investment funds.
About the IFC African, Latin American, and Caribbean Fund
The IFC ALAC Fund is a $1 billion investment fund that invests alongside
IFC in equity investments in Sub-Saharan Africa, Latin America, and the
Caribbean. It provides long-term growth capital for private enterprises
in these regions.
PetroNova, through its subsidiaries,
is engaged in the exploration for, and the acquisition and development
of, oil and natural gas resources in South America, specifically in Colombia.
The Company's assets currently include the Company's interests in the PUT-2
and Tinigua Blocks located in the Caguan-Putumayo Basin in Colombia, both
of which are operated by the Company, and the non-operated CPO-06,CPO-07
and CPO-13 Blocks located in the Llanos Basin in Colombia.
Legal Disclosure about IFC and the
IFC ALAC Fund's Investment
The investment of approximately CAD$27
million in PetroNova will result in IFC acquiring 23,076,923 units issued
by PetroNova and the IFC ALAC Fund acquiring 18,461,538 units. PetroNova
is expected to issue up to 4,615,385 units to additional investors, which
may include members of PetroNova’s management and board of directors and
other investors, on substantially the same terms as IFC and the IFC ALAC
Each unit is composed of one common share,
one-half (1/2) of a Warrant A, one-half (1/2) of a Warrant B and CAD$0.0975
of face value of unsecured, non-interest bearing convertible notes (the
“Notes”). Each whole Warrant A entitles the holder to purchase
one common share of PetroNova at an exercise price of CAD$1.25 per common
share for a period, subject to acceleration in accordance with its terms,
of three years from the date of issuance. Each whole Warrant B entitles
the holder to purchase one common share of PetroNova at an exercise price
of CAD$1.25 per common share for a period of three years from the date
of issuance. The Notes are payable by way of common shares of PetroNova
(or, in accordance with its terms, cash) on August 15, 2013.
The issue price per unit is CAD$0.65.
It is expected that upon completion of the offering of units to IFC, the
IFC ALAC Fund and the additional investors there will be 211,455,148
common shares of PetroNova outstanding. Immediately upon the closing
of these subscriptions, it is expected that IFC will have ownership and
control over approximately 10.9 percent of PetroNova’s outstanding common
shares and approximately 19.7 percent of PetroNova’s outstanding
common shares assuming the exercise of all of IFC’s warrants acquired
under this private placement. Additionally, immediately upon the closing
of these subscriptions, it is expected that the IFC ALAC Fund will have
ownership and control over approximately 8.7 percent of PetroNova’s outstanding
common shares and approximately 16.1 percent of PetroNova’s outstanding
common shares assuming the exercise of all of the IFC ALAC Fund’s warrants
acquired under this private placement. These percents do not include the
payment of the Notes by way of common shares on maturity (calculated by
dividing the face value of the Notes by the 20 day volume weighted average
price of the common shares on the TSX Venture Exchange).
IFC is an international organization
established by Articles of Agreement among its member countries, including
Canada, and as such, enjoys certain immunities, privileges and exemptions,
including the freedom of all of its property and assets from restrictions,
regulations, controls and moratoria of any nature. The voluntary
provision by IFC of this news release does not in any way constitute or
imply a waiver, termination or modification by IFC of any privilege, immunity
or exemption of IFC granted in the Articles of Agreement establishing IFC,
international conventions, or applicable law.
In addition, the IFC ALAC Fund will acquire
one series A preferred share in the capital of PetroNova. As holder of
the Series A preferred share, the IFC ALAC Fund will have the right to
nominate and elect one director to PetroNova’s board of director. There
are currently no other series A preferred shares outstanding.
The offering has been conditionally approved
by the TSX Venture Exchange and is expected to close on or about September
28, 2012, following the satisfaction or waiver of all the closing conditions.
IFC and the IFC ALAC Fund are each acquiring the units for investment purposes
as described above. IFC and/or the IFC ALAC Fund may, in the future, take
such actions in respect of their holdings as they deem appropriate in light
of the circumstances then existing. Under the subscription agreements entered
into between IFC and PetroNova and the IFC ALAC Fund and PetroNova, each
of IFC and the IFC ALAC Fund will be granted certain pre-emptive rights.
For further information, including to
obtain a copy of the report filed with the Canadian securities regulatory
authorities in respect of which this news release relates, please contact:
Josef Skoldeberg at the phone number or e-mail address referred to above.
IFC’s headquarters are located at 2121 Pennsylvania Avenue, N.W., Washington,
D.C., 20433, U.S.A and The IFC ALAC Fund’s headquarters are located at
2121 Pennsylvania Avenue, N.W., Washington, D.C., 20433, U.S.A.