UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) May 11, 2007
CANARGO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Delaware
|
|
001-32145
|
|
91-0881481 |
| |
(State or other jurisdiction
of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer
Identification No.) |
| |
|
|
| CanArgo Energy Corporation |
|
|
| P.O. Box 291, St. Peter Port |
|
|
| Guernsey, British Isles
|
|
GY1 3RR |
| |
| (Address of principal executive offices)
|
|
(Zip Code) |
Registrant’s telephone number, including area code (44) 1481 729 980
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
The matters discussed in this Current Report on Form 8-K include forward looking statements,
which are subject to various risks, uncertainties and other factors that could cause actual results
to differ materially from the results anticipated in such forward looking statements. Such risks,
uncertainties and other factors include the uncertainties inherent in oil and gas development and
production activities, the effect of actions by third parties including government officials,
fluctuations in world oil prices and other risks detailed in the Company’s Reports on Forms 10-K
and 10-Q filed with the Securities and Exchange Commission. The forward-looking statements are
intended to help shareholders and others assess the Company’s business prospects and should be
considered together with all information available. They are made in reliance upon the safe harbor
provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company cannot give assurance that the results
will be attained.
Section 7—Regulation FD
Item 7.01. Regulation FD Disclosure.
The following information is furnished pursuant to Item 7.01, “Regulation FD Disclosure.”
May 11, 2007 — Guernsey, British Isles — CanArgo Energy Corporation (“CanArgo”) (OSE: CNR, AMEX:
CNR) ) today announced that it has reached agreement in principle with certain of its noteholders
to convert an aggregate of $15 million of its convertible debt into a portion of CanArgo’s shares
in its subsidiary, Tethys Petroleum Limited (“TPL”). The conversion is subject to and conditional
on the finalisation of appropriate documentation and obtaining any necessary regulatory approvals.
Pursuant to the agreement, certain of the holders of CanArgo’s senior secured notes due July 25,
2009 (“Senior Noteholders”) have agreed in principle to convert $10 million in aggregate of the
outstanding principle amount of their notes into 4 million ordinary shares with a nominal value of
$0.10 each (following the recent share consolidation) in the capital of TPL (“TPL Shares”). In
addition, Persistency, one of the holders of CanArgo’s senior subordinated notes due September 1,
2009, have agreed in principle to convert $5 million of their notes into 2 million TPL Shares. The
6 million TPL Shares to be issued in total to the converting noteholders will be satisfied by the
transfer by CanArgo’s subsidiary CanArgo Limited of a portion of its existing shareholding in TPL.
Following the completion of the conversion, CanArgo’s long-term debt will be reduced by $15 million
and CanArgo’s residual holding in TPL will be 8 million TPL Shares which represents approximately
29.7% of the current outstanding share capital of TPL following the recent transactions.
As part of this transaction, the converting Senior Noteholders will be issued with warrants to
purchase approximately 11.1 million shares of CanArgo common stock at an exercise price of $0.90
per share and Persistency will be issued with warrants to purchase 5 million shares of CanArgo
common stock at an exercise price of $1.00 per share.
CanArgo also announced that TPL has today filed a prospectus with Canadian securities regulatory
authorities in respect of an initial public offering of TPL’s ordinary shares as well as a possible
sale by CanArgo of a portion of its interest in TPL. Completion of the offering is subject to
regulatory approval. Jennings Capital Inc. will act as lead agent in respect of the offering.
The information in this report (including its exhibit) shall not be deemed to be “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or
otherwise subject to liability of that section. The information in this report (including its
exhibit) shall not be incorporated by reference into any registration statement or other document
filed under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general
incorporation language in such filing, except as shall be expressly set forth by specific reference
in such filing.
A copy of the Press Release is attached hereto as Exhibit 99.1.
Section 9—Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
| |
|
|
|
| Exhibit No. |
|
Exhibit Description |
|
99.1
|
|
Press Release dated
May 11, 2007 issued by CanArgo Energy Corporation. |
|
-2-