Touchstone Exploration Inc. ESCROW ARRANGEMENTS FOR US$20 MILLION TERM LOAN (9980N)
27 May 2020 - 4:00PM
UK Regulatory
TIDMTXP
RNS Number : 9980N
Touchstone Exploration Inc.
27 May 2020
TOUCHSTONE ENTERS INTO ESCROW ARRANGEMENTS FOR US$20 MILLION
TERM LOAN
CALGARY, ALBERTA (May 27, 2020) - Touchstone Exploration Inc. (
" Touchstone ", "we", "our", "us" or the " Company " ) (TSX, LSE:
TXP) announces that its indirect wholly-owned subsidiary,
Touchstone Exploration (Trinidad) Ltd., has entered into escrow
arrangements for a US$20 million, seven-year term loan agreement
(the "Term Loan") with Republic Bank Limited, as initial lender,
arranger and administrative agent. The Term Loan was arranged
exclusively by the Corporate and Investment Banking Division of
Republic Bank.
The Term Loan is expected to become effective prior to June 15,
2020 once all conditions precedent have been met, which include the
completion of security interest filings in Trinidad and Barbados
and the receipt of regulatory approvals in Trinidad. A portion of
the Term Loan proceeds will be used to repay the Company's C$20
million existing credit facility, with the remainder used for
general corporate purposes.
Material terms of the Term Loan are as follows:
Touchstone Exploration (Trinidad) Ltd.
* Borrower
Senior secured syndicated loan, with Republic
* Facility type Bank Limited acting as initial lender,
arranger and administrative agent
US$20 million
* Facility amount
Seven years from closing date
* Term
7.85% per annum, payable quarterly in
* Fixed interest rate arrears
Principal moratorium for two years; thereafter
* Principal amortization schedule twenty equal and consecutive quarterly
principal repayments
Permitted after one year with a 1.0% penalty
* Prepayments and a 30-day notice period, no penalties
payable after three years
Senior mortgage over fixed assets of the
* Collateral Borrower and its subsidiaries and corporate
guarantee from Touchstone Exploration
Inc.
Net Senior Funded Debt to EBITDA less
* Financial covenants (to be initially tested for the than 2.5 times
year ended December 31, 2022) Net Senior Funded Debt to Book Value Equity
less than 0.7 times
Debt Service Coverage Ratio greater than
2.5 times
Maintain a balance of not less than the
* Cash reserve balance equivalent of two quarterly interest payments
due
Underwriting fee of 0.75% of facility
* Fees amount
Scott Budau, Chief Financial Officer, commented:
"We are pleased to be able to source local financing from
Republic Bank, the largest lender in Trinidad and the Caribbean.
The financial flexibility of the new facility will us allow to
confidently proceed with our Ortoire exploration activities. In
addition, the interest payable on the loan is expected to be tax
deductible in Trinidad, equating to an after-tax cost of capital of
3.5%. We would also like to give our sincere thanks to Crown
Capital, who has supported us since 2012."
Prior to the effective date of the Term Loan, Touchstone
continues to operate under its existing C$20 million credit
facility. In connection with the existing credit facility, the
Company granted the lender a production payment equal to 1.33
percent of petroleum sales from Trinidad land holdings, payable
quarterly through October 31, 2021. The parties have agreed not to
buyout the production payment obligation and as such have entered
into an amended production payment agreement to continue the
obligation under the previous terms and conditions. The total
payout of the existing credit facility will include the C$20
million principal balance, all accrued interest thereon, and a 1.0%
prepayment fee.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary based company engaged
in the business of acquiring interests in petroleum and natural gas
rights and the exploration, development, production and sale of
petroleum and natural gas. Touchstone is currently active in
onshore properties located in the Republic of Trinidad and Tobago.
The Company's common shares are traded on the Toronto Stock
Exchange and the AIM market of the London Stock Exchange under the
symbol " TXP " .
For further information about Touchstone, please visit our
website at www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Mr. Paul Baay, President and Chief Executive Officer Tel: +1
(403) 750-4487
Mr. Scott Budau, Chief Financial Officer
Shore Capital (Nominated Advisor and Joint Broker)
Nominated Advisor: Edward Mansfield / Daniel Bush / Michael McGloin Tel: +44 (0) 207 408 4090
Corporate Broking: Jerry Keen
Canaccord Genuity (Joint Broker)
Adam James / Thomas Diehl Tel: +44 (0) 207 523 8000
Camarco (Financial PR)
Nick Hennis / Billy Clegg Tel: +44 (0) 203 781 8330
Advisories
Forward-Looking Statements
Certain information provided in this announcement may constitute
forward-looking statements within the meaning of applicable
securities laws. Forward-looking information in this announcement
may include, but is not limited to, statements relating to the
expected use of proceeds from the Term Loan and expected closing
and timing of the Term Loan. Although the Company believes that the
expectations and assumptions on which the forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurance that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. Certain of these
risks are set out in more detail in the Company's 2019 Annual
Information Form dated March 25, 2020 which has been filed on SEDAR
and can be accessed at www.sedar.com. The forward-looking
statements contained in this announcement are made as of the date
hereof, and except as may be required by applicable securities
laws, the Company assumes no obligation to update publicly or
revise any forward-looking statements made herein or otherwise,
whether as a result of new information, future events or
otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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