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Red Rock to raise C$2.5M for reorganization, relisting on bourse

Red Rock Energy Inc. on Jan. 25 said it outlined reorganization plans and subsequent reactivation on the TSX Venture Exchange, including raising as much as C$2.5 million through nonbrokered private placements and issuance of shares for debt.

The company said it will issue up to 18 million common shares at 5 Canadian cents each to repay an outstanding debt of C$900,000. It will then consolidate the issued and outstanding shares, pending shareholder approval, on the basis of 15 old shares for each new share.

Red Rock will then issue 10 million units at 5 cents per unit for gross proceeds of C$500,000 to an investor group including Jose Francisco Arata, Marino Ostos, William Mauco and Krishna Vathyam, who are expected to subscribe to 2.5 million units each.

Each unit comprises of 1 consolidated share and one warrant redeemable for one additional consolidated share at 10 cents within 12 months.

Another 20 million post-consolidation shares at 10 cents per share for gross proceeds of C$2 million will be completed by way of a nonbrokered private placement, concurrent with the closing of the TSX Venture Exchange reactivation and relisting.

Red Rock intends to explore various strategic options for relisting, which may include the commissioning of a new work program on one of its existing properties.