Camber Energy Inc (NYSEAMERICAN: CEI) is flying early on in the market this morning, and for good reason. The company announced that it has issued a letter of intent surrounding asset disposition and assignment of debt with a goal of maintaining compliance with NYSE rules. Of course, the news excited investors who are sending the stock toward the top. Today, we’ll talk about:
- The letter of intent;
- what we’re seeing from CEI as a result; and
- what we’ll be watching for ahead.
CEI Announces Letter Of Intent
As mentioned above, Camber Energy is having an incredibly strong start to the trading session after the company announced a letter of intent. In a press release issued early this morning, the company announced the execution of a non-bind letter of intent that took place on June 25, 2018. The LOI was in connection with the disposition of a substantial portion of its assets in exchange for the buyer’s assumption of all CEI debt with its bank, the International Bank of Commerce.
In the release, CEI said that the proposed buyer associated with the letter of intent is a party affiliated with Richard N. Azar II, former CEO at Camber Energy and director who resigned on June 21, 2018, as well as Donnie B. Seay, the current director of the company. In the release, the company said that the closing of the transaction is subject to customary closing conditions including the negotiation of definitive closing documents, approval of IBC and shareholder approval, among other conditions. In a statement, Louis G. Scott, CEO at CEI, had the following to offer:
This transaction will position the Company to improve its balance sheet by substantially reducing or eliminating its long-term liabilities. Once this occurs, the Company plans to pursue growth in its remaining assets as well as additional acquisition opportunities.
This should also help the Company to regain compliance with the continued listing standards of the NYSE American.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Camber Energy, the news proved to be overwhelmingly positive. After all, if definitive documents are drawn up here, the company will be relieved of debt and regain compliance with the NYSE. So, it’s no surprise that excited investors are sending the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:06), CEI is trading at $0.27 per share after a gain of $0.055 per share or 25.01% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CEI. In particular, we’re interested in following the story surrounding the LOI and seeing if this transaction does indeed close. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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