US Energy Strikes Deal With Lender APEG Energy II

U.S. Energy (USEG), an oil & gas company, said Thursday it has reached an agreement with APEG Energy II, the sole lender of its senior secured credit facility, to exchange nearly $4.5 million in borrowings for over 5.8 million new shares.

Trading in U.S. Energy shares was halted at 4:55 pm EST Wednesday. The stock trades in a 52-week range between $0.60 and $2.74.

The exchange price of $0.77 represents a 1.3% premium to the 30-day volume weighted average price on Sept. 20.

U.S. Energy said that when the deal closes, APEG will hold approximately 49.9% of the company’s stock. The companies also entered into a standstill agreement for one year that will restrict APEG’s ability to acquire additional shares or seek representation on the board. The transaction is expected to close in Q4.

CEO David Veltri said the deal will reduce its debt by 84% and save $0.4 million in annual interest payments.

Leave a Comment