CALGARY - Petrolifera Petroleum Ltd. (TSX:PDP) and Connacher Oil and Gas Ltd. (TSX:CLL) announced that Richard Gusella has been forced to sell a significant portion of his common stock in the two companies to meet margin loan calls since the beginning of October.
Gusella is president and CEO of Connacher and executive chairman of Petrolifera, both headquartered in Calgary. As such, he's an insider of both companies.
With a margin call loan, the investor borrows some of the money used to buy stock and uses the securities as collateral. If the underlying stock's value falls, the investor may need to add additional funds to the account or sell shares as required by terms of the loan.
The two companies each issued statements from Gusella that said he remains confident in them and expressing his disappointment at the need to sell significant portions of his holdings.
He said the sales were "obviously triggered by the unprecedented deterioration in capital markets triggered by the worldwide credit and ensuing financial crisis."
Petrolifera is involved in exploration and production in Argentina, Colombia and Peru while Connacher's main asset is its Great Divide oil sands properties. Connacher also has an equity stake in Petrolifera.
Petrolifera shares traded Tuesday at $2.91, up 44 cents. Connacher shares traded at $2.16, up 26 cents.
According to the companies, Gusella began selling Petrolifera shares on Oct. 3 and Connacher stock on Oct. 6 as required by margin loans.
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