Through a definitive arrangement agreement, a group of investors based in China will purchase all the outstanding common shares and all outstanding 6.40% convertible debentures of Long Run Exploration Ltd., the company said Dec. 21.

The outstanding shares are priced at 52 cents Canadian each. The outstanding convertible unsecured subordinated debentures are due Jan. 31, 2019, and the cash consideration is CA$750 per CA$1,000 principal amount plus accrued and unpaid interest.

The proposed transaction will be completed through a plan of arrangement under the Alberta Business Corporations Act.

The transaction’s value including assumption of Long Run's current net debt and transaction costs, is about CA$770 million.

Principals of the purchaser have extensive experience in oil and gas operations around the world and hold direct and indirect and controlling interests in midstream and downstream oil and gas assets and LNG projects in China. They also recently completed significant controlling investments in Canada’s upstream sector.

All of Long Run’s directors, executive officers and certain shareholders entered into support agreements and agreed to vote about 11% of the outstanding shares in favor of the transaction, subject to support agreement’s provisions.

The purchaser deposited $10 million with an escrow agent in Canada and will deposit $10 million more into escrow following Long Run shareholders’ approval of the transaction. There are various closing conditions including court approval, receipt of the bank waiver and certain approvals in China.

Long Run will schedule a special meeting in February 2016 and the transaction is scheduled to close after all conditions are met..

Macquarie Capital Markets Canada Ltd. is Long Run’s lead financial adviser. Scotia Waterous Inc. and National Bank Financial Inc. are also financial advisers to Long Run.

Long Run is based in Calgary, Alberta.