TORONTO, Aug. 3, 2012 /CNW/ - Marret Resource Corp. (TSX: MAR) (the "Company") is pleased to announce that it participated in the recently announced financing commitment by a syndicate of lenders (the "Lenders") providing for the issuance of up to US $20 million in principal amount of first lien senior secured notes (the "Notes") by Xinergy Ltd. (TSX: XRG) ("Xinergy"). The financing commitment provides that the Notes would bear interest at a rate of 9.875% per annum, have a three year term and be issued at an original issue discount of 98% of face value.
The Company has committed to acquire $7,923,000 of the Notes and in consideration will receive a commitment fee of $79,230 and 396,150 common share purchase warrants with a five year term ('Warrants") and a strike price of CDN $1.20 per share. If the financing is drawn, it will also receive 198,075 Warrants with a strike price equal to 120% of the volume weighted average trading price of Xinergy's common shares for the five day period immediately prior to the Xinergy's delivery of notice its intention to draw on the facility.
Closing of the financing is subject to customary closing conditions, and issuance of the warrants is subject to Toronto Stock Exchange approval.
The current yield on the Company's portfolio was 6.51% as of August 1, 2012 and the net asset value of the common shares was $5.56. Based on the current portfolio and net asset value, should Xinergy draw on the facility, the portfolio current yield would be 7.26%.About Xinergy Ltd. Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky, West Virginia and Virginia. Xinergy sells high quality thermal and metallurgical coal to electric utilities, steelmakers and industrial companies. For more information, please visit www.xinergycorp.com. About Marret Resource Corp. Marret Resource Corp. is focused on natural resource lending. The Company's business is primarily directed to investing in public and private debt securities of and making term loans (including bridge and mezzanine debt) to issuers in a broad range of natural resource sectors, including energy, base and precious metals and other commodities, and issuers involved in exploration and development, and may also include financing other resource‐related businesses and investing in public and private equity and quasi‐equity securities. The Company seeks to generate income mainly from its lending activities, while taking advantage of additional upside through equity participation in the companies which it finances. Marret Asset Management Inc. is responsible for implementing Marret Resource Corp.'s investment strategy and managing its investment portfolio.
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