The Board of Independent Resources plc, the AIM listed oil and gas exploration and production company with activities in Tunisia, Egypt and Italy, announces that it has raised additional immediate short-term working capital through a subscription by investors introduced through Brandon Hill Capital Limited, the Company’s broker for £200,000 in the form of loans convertible at the option of the Company.
The Convertible Loans, together with accrued interest thereon, will be repayable in cash or convertible at the option of IRG into new ordinary Shares of 0.01p each in the Company at any point after issue. The issue price of new ordinary shares issued by the Company to repay the Convertible Loans and accrued interest thereon, will be the lowest, inter alia, of:
i. the average closing middle market price for the Company’s ordinary shares for each business day in the period commencing 16 May 2016 and ending on the date that the Company exercises its right to require conversion, less a discount of 20 per cent; or
ii. the average of the three lowest closing middle market prices for the Company’s ordinary shares in the period commencing 16 My 2016 and ending on the date that the Company exercises its right to require conversion less a discount of 10 per cent.; or
iii. the issue price of any ordinary shares of the Company issued in connection with an equity placing undertaken by the Company after the date of issue of the Convertible Loans, where such an equity placing would be deemed to comprise an event which would trigger a mandatory conversion of the Convertible Loans and accrued interest outstanding at the time of any such placing.
The Convertible Loans are unsecured and interest shall accrue daily on the Convertible Loans at a rate of 5 per cent. per week of the principal amount of the Convertible Loans until their repayment. Applicable interest pursuant to the Convertible Loans shall not be compounded.
The Company intends to use the net proceeds from the issue of the Convertible Loans for short-term working capital purposes.
As set out in the announcement of 9 May 2016, the Directors have taken significant steps to reduce the trade creditors of the Company and its working capital requirements until the Company, by growing its business, achieves the financial strength necessary to enable it to incur higher levels of cash costs.
The Company is progressing further debt reduction discussions with other trade creditors and continues to explore raising additional equity finance in the next couple of months to supplement the proceeds of the Convertible Loans and provide ongoing working capital to allow it to continue as a going concern and future investment requirements. The Company will update the market when further progress is made.
Greg Coleman, CEO of Independent Resources, commented:
“I am pleased that the Company has secured additional short term working capital as we continue to work towards putting the Company on a sounder longer term financial footing. The loan arrangements give IRG flexibility of conversion and will provide an important bridge to allow us to progress to collection of revenues in Egypt and advance other initiatives for the benefit of shareholders. We look forward to updating the market on our progress on these initiatives as they develop.”
(Source: Independent Resources plc)