Aveda Transportation and Energy Services, a Calgary, Alberta, Canada-based provider of oilfield hauling services and equipment rentals to the energy industry, has entered into an amending agreement pursuant to which Werklund Capital Corp. granted Aveda the right to unilaterally convert $4.72 million principal amount of convertible debentures registered in the name of WCC into common shares of the company. Upon electing to convert the convertible debentures into common shares, Aveda will pay 75 percent of the remaining interest payable from the conversion date until maturity.
As part of its tax planning for fiscal 2013, Aveda intends to convert the convertible debentures on or before Dec. 31. The convertible debentures have a term of three years, expire on Dec. 13, 2014, bear interest at a rate of 4 percent per annum, payable quarterly in arrears, and are convertible into 1,850,980 common shares at a price of $2.55 per share.
"Over the last two years, the Aveda team has demonstrated a consistent ability to improve the operational and, consequently, financial performance of the business," said David Werklund, executive chairman of WCC. "We are firm believers in the future growth of Aveda and, on that basis, intend to retain our increased position in the Company post conversion."
"We are seeing an increasingly diverse and robust pipeline of acquisition opportunities become available and are actively evaluating a number of avenues for growth," said Bharat Mahajan, vice-president, finance and chief financial officer of Aveda. "The planned conversion of the Convertible Debentures into Common Shares helps clean up the balance sheet and provides us with improved financial flexibility to pursue and fund these and other growth opportunities both organic and acquisitive."
Pursuant to the terms of the original transaction, upon full conversion, WCC shall have the right to appoint one nominee to Aveda's board of directors. Based on public filings, assuming the Convertible Debentures were converted as of the date hereof, after giving effect to the conversion, WCC will own 6,567,335 common shares of the company.
Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States principally in and around Texas and Pennsylvania. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations. For more information on Aveda, visit www.avedaenergy.com.