Each one in plain English, with the numbers worked through for a shareholder.
10 Apr 2015debt financing▼ BadMajor
Several senior secured noteholders have now demanded repayment: MSDC and Winmill on April 6, 2015, and Senator, Talara and Blackwell on April 8. Without an extension, ZaZa must repay about $12.76 million by May 6, 2015, and other holders could also demand payment on the same date. Holders of about 93% of the notes agreed to a further 30-day delay (Amendment No. 8), but it needs all holders and a ~7% minority has asked for warrant re-pricing and a higher coupon. ZaZa says it is also pursuing refinancing, with no assurance of success. It also sets the annual meeting for June 16, 2015 (record date May 5).
Nasdaq told ZaZa on February 26, 2015 that its market value of listed securities had been below the $35 million minimum for 30 business days. The listing is not affected immediately; ZaZa has 180 days to get back above $35 million for at least ten consecutive business days, or face a delisting notice (which it could appeal). This is a new listing problem, separate from the earlier bid-price issue addressed by the reverse split.
ZaZa and its senior secured noteholders signed Amendment No. 7, moving the earliest date holders can demand repayment of the $13.9 million notes from February 21 to March 23, 2015, and cutting the company's time to repay after a demand from 60 to 30 days. It also gives relief from the going-concern requirement for FY2014 accounts and waives technical defaults caused by the January 19, 2015 subordinated note changes. This continues the effort to delay the put; no refinancing is announced. The filing also furnishes an updated investor presentation (the excerpt shows 13.1 million shares outstanding and $2.11 stock price on 2/24/2015, $6.3 million cash and $101.2 million total debt at 12/31/2014, current production ~600 boe/d).
Crede CG III, Ltd, Crede Capital Group, LLC, Acuitas Financial Group, LLC, Terren S. Peizer reported no remaining ZaZa Energy Corp shareholding in its periodic institutional filing.
The founders' $47.3 million 8% subordinated notes will no longer be swapped for common shares and preferred stock, as agreed in February 2014. Instead, from January 1, 2015 interest is added to the principal rather than paid in cash. Maturity stays August 21, 2017. This replaces the earlier plan, so the dilution from that exchange is off, and the change does not wait for the senior note refinancing. The senior secured notes can be put back to ZaZa from February 21, 2015, with up to 60 days to repurchase. The company says it is still trying to refinance them or push back that date.
Zazove Associates, LLC, Zazove Associates, Inc, Gene T. Pretti reported a ZaZa Energy Corp shareholding of 1,129,000 shares (8.51% of votes) in a periodic institutional filing.
ZaZa settled a dispute with Crede over the July 2014 warrants. After the 10-for-1 reverse stock split effective August 19, 2014, the warrants covered 361,493 shares, and the two sides disagreed over how many shares an exchange would yield. ZaZa will issue 787,530 shares now and 212,470 more later, 1,000,000 in total, in return for all the warrants. Both sides released each other from further obligations under the July agreement. Inference: the second $2.5 million closing no longer appears to apply. This resolves the Crede warrant terms with more shares than the company said it owed.
The Quantum sale of 6,000 net acres of East Texas JV leases closed on September 18, 2014 for about $17 million. That is $11 million in cash plus the right to Quantum's interest in certain future wells. A separate development agreement sets up a shared area for future acreage purchases. Of the cash, $1.1 million had to go to repay the senior secured notes, bringing them to $13.9 million. The rest is meant for drilling and lease costs. This completes the deal announced August 27.
Crede CG III, Ltd, Crede Capital Group, LLC, Acuitas Financial Group, LLC, Terren S. Peizer disclosed a new substantial ZaZa Energy Corp shareholding (7.89% of votes).
ZaZa agreed to sell Quantum Energy Partners an affiliate's roughly 4% working interest (6,000 net acres) in undeveloped East Texas JV leases. In return it gets about $17 million in cash plus the right to take Quantum's interest in the next 15 JV wells. ZaZa keeps its interest in existing wells and will receive ongoing G&A reimbursement. Two years after closing, Quantum can require ZaZa to buy back its interest at a price based on Quantum's lease costs. Closing needs approval from the existing JV partner and is not assured.
