RE: Business Acquisition Report29 Aug 2021 17:12
Just a reminder regarding Cuda, from the Sedar News Release of 9th August …
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00015378
“(Newsfile Corp. - August 7, 2021) - Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") is pleased to announce an additional $4.0 million of financing ("Credit Facility B") from its Senior Lender, Tallinn Capital Energy Limited Partnership ("Tallinn"), under the Senior Credit Facility agreement signed on January 20, 2021. The additional proceeds will be used for the payment of account payables relating to, and continued development of, its oil assets and miscible gas flood injection program in the Powder River Basin, Converse County, Wyoming.”
“Tallinn and the Company have agreed to engage a sales advisor by August 9, 2021 to pursue a sales process, including the opening of an online data room by August 27, 2021. Additionally, the Company shall execute one or more non-binding letters of intent by September 30, 2021 and a binding offer to purchase by October 31, 2021.”
So Tallinn are lending Cuda $4m to keep them going until they can be sold by October 31st (note – data room open as of August 27th).
I think Arthur had no real option but to ‘stake a claim’ for the moneys owed and hence the legal action – as sale of Cuda, with money paid to Tallinn only, is probably not the best outcome for COPL.
I suspect that, in the event of a Cuda foreclosure / bankruptcy, Tallinn (as lender) will be higher in the ‘pecking order’ than COPL (as creditor) in terms of getting money back – but the ‘money’ is effectively tied up in the licence assets – and what would Tallinn want with part ownership of an oil field, would have thought they just want their money back plus interest?
Opportunity for a ‘deal’?
GLA
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