Key Highlights
- Dune Oil plans to settle its 12.0% convertible debentures by issuing 93,333,334 shares.
- The settlement deems principal and interest at C$14 million, converted at C$0.15 per share.
- The Canadian Securities Exchange approved a hardship exemption, so no shareholder vote is planned.
Dune Oil Corp. (CSE: DUNE) (OTCQB: DUNXF) (FSE: Z62) plans to eliminate its outstanding 12.0% convertible debentures through a share-for-debt conversion that the company says is intended to strengthen its balance sheet and support work on its onshore M47 oil block in southeastern Türkiye.
The company said the amount due under the debentures, including principal and interest, will be deemed to be C$14,000,000 and converted into 93,333,334 common shares at a fixed price of C$0.15 per share. Dune said that, upon conversion, all obligations relating to the convertible debentures will be extinguished.
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Dune said the settlement shares will be subject to a contractual lock-up, with releases scheduled over 36 months. The company expects to complete the settlement on or about October 27, 2026.
The company said no warrants or other securities will be issued as part of the settlement, and that the share issuance, forgiveness of remaining amounts owing, and cancellation of the debentures will occur together on the closing date.
Canadian Securities Exchange approval and shareholder vote exemption
Dune said the Canadian Securities Exchange (CSE) approved the settlement under CSE Policy 4 after the company applied to rely on a hardship exemption. The company said it will not seek security holder approval for the transaction.
According to the release, the settlement shares represent about 132.9% of Dune’s 70,235,728 common shares currently outstanding. On closing, the company said a certain debenture holder and its affiliates would hold about 26.70% of the outstanding common shares, above the 20% level at which a holder is presumed to be a control person under CSE policies.
Dune said its reliance on the hardship exemption was based on a pre-settlement working capital deficit and near-term cash requirements, including a US$4.1 million M47 work-program payment due on or before November 15, 2026, and a C$1 million settlement payable to a creditor due no later than November 30, 2026.
Expected share count after closing
Dune said that, if the settlement is completed, it expects to have 163,569,062 common shares outstanding, with existing shareholders holding about 42.94% of the total. The company said three former debenture holders are expected to hold more than 10% each and may be required to file early warning reports under securities laws.
The company said the recapitalization is not intended to result in a change of control, and that no debenture holder will receive board nominations or other governance rights as a result of the settlement.
The original press release is available on stockhouse.com
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