Admiral Bay Resources Updates Strategic Review Process
March 25 2010 - 3:26PM
Marketwired
Admiral Bay Resources Inc. (TSX VENTURE: ADB) Admiral Bay Resources
Inc. ("Admiral Bay" or the "Company") today provided an update on
its strategic review process announced in October of 2009.
As a result of the review process, the Company is currently in
discussions with a third party regarding a possible strategic
combination. While discussions are ongoing there is no guarantee
that such talks will result in an agreement between the parties. In
addition, as a result of sustained, low realized natural gas
prices, the Company believes that consideration paid for any
combination is likely to be below the current enterprise value of
the Company. Any transaction would be subject to approval by
shareholders as required under British Columbia corporate and
securities laws and consent of the Company's lenders.
Should the Company not reach an agreement for a strategic
combination, the Company's current lenders may choose to exercise
their right to foreclose on certain assets of the Company that were
pledged as security under the current credit facility. As a result,
the Company is discussing potential options to restructure its debt
with current lenders. The outcome of such discussion is uncertain.
Should the Company not reach an amicable agreement with its current
lenders, the lenders may choose to initiate foreclosure
proceedings.
From February 2009 to November 2009, the Company entered into
five amendments to the credit facility that have allowed the
Company to capitalize certain interest amounts. Such capitalized
interest is added to the loan balance. Those amendments allowed the
Company to pay a minimum of 5% cash interest and capitalize 10%
interest on a monthly basis. The current amendment allowing the
capitalization of interest was extended through January 2010 and
included an extension on the maturity of the Neodesha Loan for
approximately $1.8 million through January 2010. The lenders did
not provide additional extensions.
In anticipation of the possibility of foreclosure action by
Admiral Bay's lenders, the Company has retained counsel to review
possible responses to any action which range from continued
negotiations to more formal, court-supervised reorganization of the
Company and its subsidiaries.
The Company will provide additional information as
appropriate.
About Admiral Bay Resources
Admiral Bay Resources Inc. (www.admiralbay.com) is an emerging
unconventional gas production company focused on the development of
projects in the Cherokee Basin in southeast Kansas and the
Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX
Venture Exchange under the symbol ADB.
Statements in this release that are not historical facts are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that any such statements are not guarantees of future performance
and that actual developments or results may vary materially from
those in these "forward-looking statements".
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Admiral Bay Resources Inc. Steven Tedesco President
& C.E.O. (303) 350-1255 (303) 617-8956 (FAX)
stedesco@admiralbay.com Admiral Bay Resources Inc. Robert Carington
CFO (303) 350-1255 (303) 708-1861 (FAX) rcarington@admiralbay.com
www.admiralbay.com
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