Max Petroleum Plc announces closing of Sberbank facility
Monday, Dec 31, 2012

Max Petroleum, an oil and gas exploration and production company focused on Kazakhstan, is pleased to announce today it has completed the initial closing of its US$90 million senior credit facility with SB Sberbank JSC (the “Sberbank Facility”), allowing the Company to draw down up to US$60 million to repay US$47 million to Macquarie Bank Limited (“Macquarie”) and partially fund its ongoing shallow drilling programme.

As of 28 December 2012, the Company had paid Macquarie US$47 million in accordance with the terms of its comprehensive debt restructuring (the “Restructuring”) and had cancelled the Macquarie credit facility. A further US$3 million payment is expected to be paid to Macquarie by 31 March 2013 to fully settle all remaining obligations owed to Macquarie under the terms of the Restructuring. A further US$30 million will be made available under the Sberbank Facility as soon as certain conditions precedent are met, including the registering of security and obtaining requisite government regulatory approvals, which are expected to be completed by 31 March 2013. The second tranche of the Sberbank Facility will be used to fund the remaining US$3 million payment to Macquarie, approximately US$3.4 million owed to certain tendering bondholders of the Company’s US$85.6 million 6.75% convertible bonds (the “Bonds”), and the Company’s ongoing shallow exploration and production drilling programme and related expenses.

As announced on 21 December 2012, a total of US$6.7 million in principal amount of the Bonds were tendered for cash payment out of a total principal amount available for tender of US$17.1 million. The Company will make a payment to tendering Bondholders of 50% of the US$6.7 million principal amount tendered out of the second tranche of the Sberbank Facility and the Bonds accepted into the tender will be cancelled. The remaining principal amount of the Bonds, together with accrued interest, will be converted into the Company’s ordinary shares of 0.01p (the “Shares”) at a price of 5p per Share in two tranches. The first tranche of approximately US$56.7 million of Bonds and accrued interest was converted into approximately 709 million Shares on 21 December 2012.

The remaining US$22.2 million in Bonds, plus accrued interest, will be mandatorily converted into Shares following the receipt of requisite Kazakh regulatory approvals expected in the first half of 2013. Following conversion, each tranche of the Shares will be allotted and applications will be made for them to be admitted to trading on AIM (each an “Admission”). The first Admission is of 709 million Shares is expected to occur on 31 December 2012.

Until conversion, the terms of the remaining outstanding Bonds have been modified such that the coupon will be 10% per annum with interest payable in kind and the maturity date has been extended to 8 March 2018 (though it is expected that these remaining Bonds will convert into Shares in the first half of 2013). Shares issued to Bondholders as part of the Restructuring are subject to a 90 day lock up from the date of the initial conversion.

Source: Max Petroleum Plc

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