WesternZagros Defers Draw Date on Debt Facility

By John Lee.

WesternZagros Resources has announced that it has reached agreement with its major shareholder, Crest Energy International, to further extend the date by which the Company must deliver to Crest the first drawdown notice (the "Drawdown Deadline") for both debt tranches.

Pursuant to the terms of the Loan Agreement, Crest has agreed to provide debt financing to the Company of up to US$200 million in two tranches. One tranche is for up to US$50 million (the "$50M Tranche") and the other tranche is for up to US$150 million (the "$150M Tranche").

Once an initial draw has been made under a tranche, the drawn amounts accrue interest at 14 and 12 percent per annum under the $50M Tranche and the $150M Tranche, respectively, and the undrawn amount under the tranches accrues a commitment fee of 8 percent per annum.

Pursuant to the Amending Agreement, the Drawdown Deadline for the $50M Tranche has been extended from November 1, 2016 to March 1, 2017. In addition, the maturity date for this tranche has also been extended from November 1, 2018 to March 1, 2019. The Drawdown Deadline for the $150M Tranche has been extended from April 1, 2017 to August 1, 2017, with a corresponding extension of the maturity date for this tranche from April 1, 2019 to August 1, 2019.

This deferral of the deadlines provides the Company with an opportunity to reduce commitment fees and interest costs as it does not expect to need to access any funds until the first quarter of 2017 based upon the currently anticipated level and timing of capital expenditures.

All other terms of the Loan Agreement remain in effect unamended, including the above-mentioned interest rates and commitment fees, as well as the condition precedent to drawdown that nothing has occurred since the closing of the Loan Agreement on November 18, 2014 (the "Closing Date") which could reasonably be expected to have a material adverse effect on the Company (as defined in the Loan Agreement).

The Amending Agreement preserves Crest's right to determine if a material adverse effect has occurred since the Closing Date at the time that any drawdown notice is provided by the Company.

(Source: WesternZagros)

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