Each one in plain English, with the numbers worked through for a shareholder.
14 Jan 2010bankruptcy or receivership▼ BadMajor
The plan took effect January 8, 2010: CanArgo ceased operations, transferred all operating assets to Blake Oil & Gas (a Guernsey company), and set up a liquidating trust to pursue the lawsuit against the 2008 rights-offering standby underwriters and distribute any net proceeds. Persistency's DIP loan was converted into convertible preferred stock of Blake O & G, and certain creditors get Blake shares or notes. CanArgo is to be dissolved, its stock has stopped trading, and all officers and directors leave office. Stockholders of record on January 8 will receive trust interests, which have transfer restrictions and are unregistered; their value depends on any litigation proceeds, which the filing does not quantify.
30 Dec 2009bankruptcy or receivership● NeutralMajor
On December 23, 2009 the bankruptcy court approved CanArgo's prepackaged Chapter 11 plan, in substantially the form filed October 28. The filing does not describe what the plan gives shareholders; that comes in the next filing.
3 Nov 2009bankruptcy or receivership● NeutralMajor
On October 29, 2009 CanArgo and Persistency signed the debtor-in-possession financing agreement (up to $1.2M, secured on all assets, with subsidiary guarantees), and the bankruptcy court approved it and an initial draw on an interim basis. The first advance repaid $73,122 owed on a bridge loan to the Guernsey subsidiary and $253,087 of Persistency's professional fees, with the rest for working capital. This finalizes the financing announced October 28.
On October 28, 2009 CanArgo filed a voluntary Chapter 11 petition in the Southern District of New York (No. 09-16453), after signing a Plan Support and Lock-up Agreement with its Sept 2009 noteholders, Persistency and other creditors to back a reorganization plan. Persistency committed to lend up to $1.2M of debtor-in-possession financing secured on all the company's assets. The filing triggered default and acceleration of the two note series, about $18.1M of principal and interest due as of October 27, 2009. This is the bankruptcy that earlier risk language had flagged as possible; the filing does not state what equity holders will receive.
On October 16, 2009 Persistency agreed again not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes into CanArgo shares before December 31, 2009 (same exceptions). This extends the standstill that had run to November 15, 2009; the filing gives no reason.
The Oslo Børs board resolved on August 27, 2009 to delist CanArgo shares from September 14, 2009, and CanArgo will not appeal. CanArgo says it aims to list on the Norwegian OTC B list from the same date; that is an aim, not a confirmed listing. This resolves the Oslo delisting decision flagged for August 26, leaving the Pink Sheets (CANR) as the only quotation noted in the filing.
On August 21, 2009 Persistency agreed again not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes into CanArgo shares before November 15, 2009 (with the same exceptions as before). This extends the earlier standstill that ran to August 31, 2009; the filing gives no reason.
On July 14, 2009 the Oslo Børs told CanArgo that its board will decide on delisting the shares at a meeting on August 26, 2009, and the shares may be delisted soon after. This sets the date for the decision flagged in the July 6 filing; no decision has yet been made.
On July 3, 2009 the Oslo Børs notified CanArgo it is in breach of its continuing obligations (annual report not filed within four months of year end; share price below NOK 1 for over six months) and gave notice of delisting. CanArgo says it does not believe it has the financial means to comply in the near term and expects delisting procedures to start right after July 13, 2009. This continues the listing problems that began with the NYSE delisting.
On May 27, 2009 Persistency again agreed not to convert its 12% notes before August 31, 2009. CanArgo also reported unaudited Q1 2009 results: revenue fell to $1.5M from $2.6M on lower oil prices, operating loss was $1.0M, but net income was $1.9M thanks to a $3.9M gain from the WEUS settlement. The filing states CanArgo is in default on interest payments on both its Sept 2009 and 12% 2010 notes, and in default under the WEUS settlement, with negotiations ongoing and no assurance of success.
On April 30, 2009 CanArgo's subsidiary Ninotsminda Oil Company signed a two-year gas sales agreement with Energy Trading Company Limited (introduced by SOCAR) for its share of Ninotsminda Field gas, about 1.13 MMscf per day at $3.96 per Mcf. The accompanying operations update is not detailed in the filing text, and the risk language now mentions a possible Chapter 11 filing. The sale gives a stated price and volume for a term of two years.
CanArgo's shares were delisted from NYSE Alternext US effective April 6, 2009 and now trade over-the-counter on the Pink Sheets under the symbol CANR. This completes the delisting process begun in March; the Oslo listing (OSE: CNR) is stated to continue for now.
On April 2, 2009 Persistency agreed again not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes into CanArgo shares before July 15, 2009 (same exceptions as before). This extends the standstill from June 1, 2009 (as previously extended in March); the filing gives no reason.
On March 31, 2009 CanArgo told NYSE Alternext it could not obtain audited year-end financials and so would miss the March 31 deadline for its 2008 annual report (10-K). The Exchange said it intends to suspend trading effective April 6, 2009. The Oslo Stock Exchange also sent a March 30 inquiry about CanArgo's financial condition and its suitability for continued listing (share value below NOK 1 for six months), and reminded it that Norwegian mandatory bid rules apply after the NYSE Alternext delisting. This confirms the late-filing notice of March 16 and adds Oslo listing risk.
On March 27, 2009 NYSE Alternext US told CanArgo its February 17 compliance plan was not credible and began immediate delisting proceedings. The Exchange cited concern that CanArgo could not restructure its subordinated debt, which the filing says is in default, possibly leading to bankruptcy proceedings; the risk of a late 10-K; uncertainty over recovering funds from the defaulting standby underwriters it is suing; and very low trading prices. CanArgo does not intend to appeal and expects the decision to be final on or before April 3, 2009. This resolves the January listing-risk thread against shareholders.
On March 4, 2009 Persistency agreed again not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes into CanArgo shares, now before June 1, 2009 (same exceptions), extending the earlier standstills from December and January. The notes stay unconverted for now, but the filing gives no reason or longer-term plan.
On February 9, 2009 CanArgo settled the arbitration claim brought in 2005 by WEUS Holding (a Weatherford subsidiary) over unpaid invoices for coil tubing drilling work in early 2005, which had demanded $4,931,332. CanArgo agreed to use best efforts to pay $1.2 million by February 18, 2009 and in any event by March 31, 2009, with mutual releases and each side bearing its own costs and splitting the arbitrator's costs. This resolves a long-running dispute at well below the amount claimed, but creates a $1.2 million payment obligation.
On January 26, 2009 CanArgo received a January 23 letter from NYSE Alternext confirming it is out of compliance with the rules requiring a majority-independent board and a three-member independent audit committee (two independent directors out of four, two audit committee members). It has until the earlier of the next annual shareholders meeting or one year from the board change to fix this. This continues the independence issue, now with a later deadline than the April 2008 one, and does not address the separate financial-condition notice of January 5.
On January 16, 2009 Persistency agreed again not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes into CanArgo shares, this time before April 20, 2009 (same exceptions as before), extending the December 2008 standstill. Separately, CanArgo said it has sued three of the underwriters of its recent rights offering (Caldwell Associates Limited, Provincial Securities Limited and Heritage Cie S.A.) in the Oslo Conciliation Board, and is in preliminary settlement talks with the other five, who account for $5 million of the $24.2 million commitments. This indicates those underwriters did not fulfil their commitments (an inference from the lawsuit); the filing does not state the amount claimed.
On January 5, 2009 the NYSE Alternext US (the former American Stock Exchange) told CanArgo its losses appear so substantial, or its finances so impaired, that it is questionable whether it can continue operations or meet its obligations as they fall due. CanArgo must submit a plan by February 5, 2009, and if it is accepted would have until July 6, 2009 to carry it out; the ticker becomes CNR.BC, and the Exchange also deems a reverse stock split appropriate given the low share price, warning of possible suspension or delisting if none is done in a reasonable time. CanArgo also acknowledged that after board changes announced December 8, 2008 only two of four directors are independent and the audit committee has two members, continuing the earlier independence issue. This is a more serious listing risk than the earlier governance one.
On December 11, 2008 Persistency agreed not to convert or exchange its 12% Subordinated Convertible Guaranteed Notes (due June 28, 2010) into CanArgo shares before March 20, 2009, unless CanArgo consents or an event of default, or a change of control (other than involving Persistency or an affiliate), occurs. This delays possible dilution from those notes for a short period only; the filing does not give the reason.
On October 20, 2008 CanArgo and the eight standby underwriters agreed to extend the rights offering subscription period from a maximum of four weeks to seven weeks, moving the U.S. expiry to November 21, 2008 and the Norwegian (VPS) subscription period to November 11, 2008. The filing says the underwriters had told the company that, in light of current market conditions, they are or may be unable or unwilling to meet their underwriting obligations, and the extension lets CanArgo keep talking to them and to other parties interested in alternative underwriting. This puts the July backstop in doubt.
On July 24, 2008 CanArgo signed eight firm commitment underwriting agreements with eight foreign private investors, who agreed to buy up to 242,000,000 unsubscribed shares (up to $24.2 million) at $0.10 per share in its proposed rights offering first announced April 23, 2008. Each investor gets a 7% commission (cash or shares, at the investor's option; existing stockholders only on the part above their pre-emptive share), payable even if the offering is not carried out, and the subscription period is capped at four weeks. This backstops the offering, which could add new shares at a much lower price than the earlier US$1.00 placements.
The American Stock Exchange accepted CanArgo's plan and is continuing its listing until April 4, 2008, having found a reasonable demonstration that it can regain compliance with the board independence rules by then. This eases the immediate delisting risk but the compliance problem is not yet resolved.
The American Stock Exchange sent a deficiency letter saying CanArgo remains out of compliance with board and audit committee independence rules. CanArgo submitted a plan, including using a recruiting agency, to comply by no later than April 4, 2008. If the plan is not accepted or compliance is not regained, delisting proceedings could start. This continues the listing issue from the earlier notice.
Schlumberger confirmed the Manavi M12 acid-fracturing equipment can be mobilised starting December 19, 2007, with up to three weeks to reach site. The acid is on site and well preparation is well advanced. Management expects continued testing in January 2008, a further slip from the November timing given in October. The filing names Vincent McDonnell as President and CEO, replacing David Robson in that role as shown in earlier context.
The Kumisi #1 well in Georgia is being plugged and abandoned after tests of Eocene sandstones gave water and non-commercial gas. The company says a large gas prospect may still exist in the structure and results will be reviewed. This ends the Kumisi well the company had planned. At Manavi M12, Schlumberger told the company it cannot mobilise the fracture equipment before end of October or early November, so stimulation slips from the late-September plan to November.
On September 27, 2007 CanArgo told the American Stock Exchange it does not meet board rules: only two of five directors are independent and the audit committee has two members instead of three independent ones. The Exchange gave it until December 27, 2007 to fix this, and the company says it is exploring corrective actions. This follows board changes announced September 24, 2007. It is a new listing risk for shareholders.
14 Aug 2007capital raising announcement● NeutralMajor
In August 2007, after the sale of CanArgo's interest in Tethys, about US$21 million of net proceeds was used to repay all of the Senior Secured Notes (US$20,840,396.49 put in escrow around August 3) and part of the Senior Subordinated Notes. To compensate holders for giving up their conversion rights, CanArgo issued warrants over 17,916,667 shares at US$1.00 (expiring December 6, 2007) to senior holders and 3,750,000 at US$1.00 (expiring November 13, 2007) to subordinated holders. It also agreed to sell 2,500,000 shares at US$1.00 to three investors (US$2.5 million), with 5 million warrants at US$1.00 to August 2009, to fund the Manavi M12 well fracturing. This sharply cuts debt and removes the secured notes, but the Tethys stake has been sold and the warrants and new shares add potential dilution. The text provided is cut off, so the exact amount of subordinated notes repaid and remaining is not stated.
