Estrella Completes Private Placement in Connection with Acquisition of San Antonio Colombia

Estrella International Energy Services Ltd., completed the final step in its acquisition of the Colombian oil and gas service operations of San Antonio International (San Antonio). Estrella entered into a definitive share purchase agreement with San Antonio International Oil & Gas Services LLC and Armadillo Drilling Services LLC on June 16, 2013, for the acquisition of the issued and outstanding shares of San Antonio Internacional Co. Inc. (SAI Colombia) for an initial estimated purchase price of US$117.6 million (subject to adjustments relating to cash, working capital and indebtedness). The acquisition was completed on August 1, 2013, and on closing, Estrella paid the sellers US$75.1 million in cash and assumed US$42.5 million of net debt.

The Acquisition of SAI Colombia added 20 drilling rigs, 6 workover rigs, 4 cementing sets, 2 coiled tubing units and operating bases in four locations to Estrella's Colombian operations. As a result of the Acquisition, Estrella now controls 37 rigs in the Colombian market making it the largest single rig operator in the country.

In connection with the completion of the acquisition, Estrella entered into a secured loan agreement with its principal shareholder, Ringo Holding L.P. in the amount of US$97 million and closed financing arrangements with Colombian financial institutions in the amount of US$58 million. The proceeds of the loans were used to finance the purchase price of the Acquisition, refinance the debt of SAI Colombia and for working capital purposes.

Finally, after obtaining the requisite shareholder and TSX Venture Exchange approvals, Estrella completed a private placement of 24,664,514 Series B Preference Shares to Ringo Holding for aggregate gross proceeds of approximately $123 million. The Series B Preference Shares were issued at a price of $5 per share. The proceeds of the private placement were used to repay all outstanding indebtedness owing by Estrella to Ringo Holding.

Estrella was represented in Canada by Aird & Berlis LLP with a team including James Leech (corporate finance), Francesco Gucciardo (tax) and Aaron Collins (financial services); for US law matters by Estudio Garrido Abogados with a team led by Lucas Granillo Ocampo; and in Colombia by Baker & McKenzie S.A.S. with team led by Jaime Trujillo, Juan Manuel de la Rosa and Alejandro Mesa -Neira and including Daniel Botero Vargas and Juan Felipe Jaramillo.

Ringo Holding was represented in the US by Chadbourne & Parke LLP with a team including Morton Grosz, Ted Castell, Kevin Smith, Joseph Giannini and Patrick Narvaez (corporate and commercial) and Erez Turner (tax); and in Canada by Blake, Cassels & Graydon LLP with a team including Chris Prokop (corporate and commercial) and Kathleen Penny (tax).

San Antonio was represented in the US by Davis Polk & Wardwell LLP with a team including Peter Lamb, Bryan Quinn, Gregory Hannibal and Mischa Travers (corporate and commercial); and in Canada by Davies Ward Phillips & Vineberg LLP with a team that included Patricia Olasker and Cameron Rusaw (corporate and commercial).


Chris D. Prokop James Leech Kathleen V. Penny Francesco G. Gucciardo Aaron T. Collins Patricia L. Olasker Cameron M. Rusaw


Aird & Berlis LLP Baker & McKenzie LLP Chadbourne & Parke LLP Blake, Cassels & Graydon LLP Davis Polk & Wardwell Davies Ward Phillips & Vineberg LLP