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Cardinal shares leap after billionaire doubles his stake

By Canadian Press   


Shares in junior oil and gas producer Cardinal Energy Ltd. rose eight cents or 12.3 per cent on Monday to 73 cents after it announced billionaire oilman Murray Edwards stands to nearly double his stake in the company to about 18 per cent.

Before markets opened, the Calgary-based company announced a non-brokered private placement of $16.9 million in second lien secured notes, with each subscriber also required to take part in an offering of 8.1 million equity units at 50 cents each.

The proceeds of the private placement are to be used to repay Cardinal’s 5.5 per cent subordinated convertible debentures maturing on Dec. 31, as well as for corporate purposes.

Each unit consists of a common share of Cardinal and a share purchase warrant allowing the holder to buy an additional share for 55 cents for up to three years from the closing date, expected on Dec. 29.


Cardinal says Edwards, the executive chairman of Canadian Natural Resources Ltd., has agreed to invest $13 million in the notes and will buy 6.25 million units for a total of $15.6 million.

The company says Edwards controls about 11 million shares or about 9.6 per cent of the total, plus $1.3 million worth of the debentures, adding his stake could grow to about 18 per cent with the private placement and exercise of the warrants.

“We welcome Mr. Edwards’ investment in Cardinal and his confidence in our assets and business plan and look forward to working with him as we build our company’s future,” said Cardinal CEO Scott Ratushny in a news release.

As a condition of the financing, other Cardinal insiders are also participating in the private placement for about $3.9 million in notes and 1.9 million units, the company said.

(Canadian Press)


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