Dallas, Texas 07/01/2015 (Financialstrend) – Harvest Natural Resources, Inc. (NYSE:HNR) plans to repay its long-term debt after Venezuelan Italian consortium CT Energy Holding SRL, agreed to purchase its senior secured Notes, Convertible Notes and Warrants. The company has also entered into a strategic partnership with CT Energy Holding SRL and CT Energia Holding as it tries to enhance its operations in Venezuela as well as its investment in Petrodelta.
Cash Flow Boost
Harvest Natural Resources is to generate up to $32.2 million from the sale of the senior secured Notes and Convertible Notes. The transaction also gives Harvest Natural Resources, Inc. (NYSE:HNR) an option of realizing up to $42.5 million in additional proceeds. The funding should improve the company’s liquidity levels both in the near and medium term.
The proceeds will not only be used to repay Harvest Natural Resources, Inc. (NYSE:HNR) long-term debt but also for enhancing the company’s operations both in Gabon and Venezuela. The transaction will also result in two CT Energy Holding SRL directors joining Harvest’s board of directors. Two other designees from CT Energy Holding are to represent Harvest Natural Resources on the Petrodelta board.
Shareholders Important Approval
CT Energia is to oversee Harvest Natural Resources, Inc. (NYSE:HNR) day to day operations in Venezuela while assisting in the development of a business plan and financing of Petrodelta. CTC Energia chief executive officer Alessandro Bazzoni is to take over as Harvest Natural Resources director and general manager for Venezuelan operations.
Harvest Natural Resources, Inc. (NYSE:HNR) plans to ask its shareholders at the next annual shareholder meeting to authorize new shares of common stock for future needs. Should the approval be rejected, the company may be forced to repay its non-convertible and convertible Notes upon a 60-day notice. The company may also be forced to seek alternative financing with the strategic partnership facing the threat of being terminated.