Dakota Plains Holdings Inc. (OTC: DAKP) entered into agreements to restructure certain of its outstanding debt, the company announced Dec. 11.
After completion of the debt reduction and the restructuring, Dakota Plains' total promissory notes outstanding will decrease from $26.6 million to $7.7 million.
Through agreements with holders of its outstanding promissory notes due March 1, 2014, Dakota Plains has extended the maturity of $4.6 million principal amount of indebtedness to Sept. 30, 2014. In addition, certain note holders have reduced the principal amount of their promissory notes due Oct. 31, 2015, by some $1.9 million and reduced the number of shares of common stock previously issued, in payment of certain related obligations, by 304,732 shares.
The agreements also provide that, if Dakota Plains completes an offering or placement of not less than $5 million worth of its capital stock on or before Dec. 10, 2015, then 50% of the proceeds will be used to repay, pro rata in order of maturity, all or a portion of the promissory notes now due September 2014 and $3.9 million principal amount of the promissory notes due October 2015. Additionally, if Dakota Plains completes a qualified equity placement on or before Dec. 10, 2014, then the company may elect to convert $10 million aggregate principal amount of remaining promissory notes due October 2015 into shares of common stock at the per-share price used in the offering or placement.
Assuming the registered direct offering of Dakota Plains common stock, which is scheduled to close on or about Dec. 16, is completed and results in a qualified equity placement, Dakota Plains expects to exercise its right to convert the promissory notes due October 2015, which would result in the issuance of some 4.7 million additional shares of Dakota Plains common stock and to use 50% of the proceeds from the offering to repay the promissory notes for the restructuring.
Dakota Plains Inc. engages in developing and owning transloading facilities to support the loading, marketing, and transporting of crude oil and related products from and into the North Dakota Williston Basin oil fields. The company is based in Wayzata, Minn.
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