26 March
2024
i3 Energy plc
("i3", "i3 Energy",
or the "Company")
Reduction of Share
Capital
i3 Energy PLC (AIM:I3E)
(TSX:ITE), an independent oil and gas company with assets and
operations in the UK and Canada, today announces
that its Notice of General Meeting (the "Circular") was posted to Shareholders
yesterday. The Circular contains details of a proposed reduction of
capital (the "Capital
Reduction"), being undertaken to ensure there are sufficient
distributable reserves to facilitate dividend payments in the long
term. This Capital Reduction process is not required to facilitate
the payment of the next quarterly dividend.
Terms used in this announcement have
the same meaning given to them in the Circular.
Notice of General Meeting, as
determined by the Companies Act 2006 in the UK (considered a
Notice of Special
Meeting for the purposes of Canadian
securities laws, as determined in
accordance with National Instrument 54-101 - Communication with
Beneficial Owners of Securities of a Reporting
Issuer) ("NI 54-101") and referred
to as a General Meeting throughout this Document.
The Circular, which was posted to
Shareholders yesterday, is available on the Company's website
at https://i3.energy. The Circular will also be filed under the Company's profile
on SEDAR+ at www.sedarplus.ca.
The General Meeting ("GM") is to be
held at the offices of W H Ireland Limited at 24
Martin Lane, London, EC4R 0DR at 11 a.m.
(BST) on 15 April 2024. The General Meeting will be a
"special meeting" for the purposes of NI 54-101.
Shareholders are strongly encouraged
to appoint the Chair of the meeting as their proxy for the GM. This
will ensure that your vote will be counted even if attendance at
the GM is restricted or you are unable to attend.
Shareholders should refer to the Circular for
detailed instructions as to how they may submit their proxy for the
GM.
The results of the votes on the
resolution proposed at the GM will be announced as soon as
practicable after the conclusion of the GM and will be available on
the Company's website.
Proposed Capital Reduction
As outlined in our RNS issued on 11
March 2024, the Board considers it highly desirable that the
Company has the maximum flexibility to continue the payment of
dividends in line with its dividend policy and otherwise to return
value to Shareholders. The capacity of a UK company to make
distributions is restricted by the sufficiency of distributable
reserves. The Board considers that it is to the benefit of
shareholders that the significant value in the Group is reflected
in the parent company balance sheet and is represented by
distributable profits to facilitate a sustainable dividend
policy.
The Company has transitioned to
UK-IFRS in its parent company accounts for the year ended 31
December 2023, which is the same reporting framework applied in its
consolidated Group accounts. Under the transitional provisions of
UK-IFRS, the Company has restated its investment in i3 Canada to
fair value as at the date of transition, and this remeasurement has
given rise to a reserve in equity, being the Transition Reserve.
The Transition Reserve is an unrealised profit and, as such, does
not form part of the Company's distributable reserves.
The adoption of UK-IFRS in the
Company's standalone accounts has no impact on the consolidated
financial statements of the Group.
It is therefore proposed
that:
a. the amount standing to the credit of the
Transition Reserve of £148,517,000 is capitalised by way of a bonus
issue of newly created Capital Reduction Shares with a nominal
value of £0.0001 and share premium of approximately £0.1234 on each
share;
b. the newly created Capital Reduction Shares are
cancelled by way of a Court-approved reduction of capital;
and
c. £148,396,755, being the amount standing to the
credit of the Company's Share Premium account following the Capital
Reduction Bonus Issue be cancelled.
This is expected to create
distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where
justified by the profits of the Company, or to allow the redemption
or buy-back of the Company's shares (or other distributions to
Shareholders).
If the proposed Capital Reduction is approved by
Shareholders at the General Meeting, it will be subject to the
scrutiny of, and confirmation by, the Court which will take due
account of the protection of creditors and, subject to that
confirmation and registration by the Registrar of Companies in
England and Wales of the order of the Court, is expected to take
effect by the end of May 2024.
The Board anticipates that this will
result in the creation of distributable reserves; however, this is
subject to: (i) there being no materially negative change in the
financial position or prospects of the Company; and (ii) any
provision that the Court requires the Company to make for the
protection of its creditors (although the Board does not expect any
undertakings or similar measures to be required). This will give
the Company the maximum flexibility to consider the payment of
dividends and otherwise return value to Shareholders, should the
Board consider it appropriate. It should however be noted
that if the Company is required to give undertakings to the Court,
this may delay the Company's ability to pay dividends and otherwise
return value to Shareholders.
There will be no change in the
number of Ordinary Shares in issue (or their nominal value)
following the implementation of the Capital Reduction and no new
share certificates will be issued as a result of the Capital
Reduction. The Capital Reduction itself will not involve any
distribution or repayment of capital or share premium by the
Company and will not reduce the underlying net assets of the
Company. The distributable reserves arising on the Capital
Reduction will, subject to the discharge of any undertakings
required by the Court, support the Company's ability to pay
dividends, should circumstances in the future make it desirable to
do so.
Timetable of Principal Events
The expected timetable of principal
events with respect to the Capital Reduction are as follows (more
precise dates will be announced following the conclusion of the
GM):
PRINCIPAL EVENT
|
TIME AND DATE
|
Annual General Meeting
|
11 a.m. (BST) on 15 April
2024
|
Expected date for the directions
hearing for the Court to consider the
Capital Reduction application
|
In or around April 2024
|
Expected date for the hearing by the
Court to confirm the Capital
Reduction
|
In or around May 2024
|
Expected date that the Capital
Reduction becomes effective
|
The Business Day immediately after
the Court order confirming the Capital Reduction
|
Notes
1. The times
and dates set out in this timetable and throughout this Document
that fall after the date of publication of this Document are based
on the Company's current expectations and are subject to change.
The times and dates are indicative only and will depend, among
other things, on the date upon which the Court confirms the Capital
Reduction. The provisional final hearing date is subject to change
and dependent on the Court's timetable.
2. The
timetable assumes that there is no adjournment or postponement of
the General Meeting. If the scheduled date for the General Meeting
changes, the revised date and/or time will be notified to
Shareholders by an announcement made by the Company through a
RIS.
3.
References in this Document are to London times unless otherwise
stated.
Enquiries:
i3 Energy
plc
Majid Shafiq (CEO)
|
c/o Camarco
Tel: +44 (0) 203 757 4980
|
|
|
WH Ireland
Limited (Nomad and Joint Broker)
James Joyce, Darshan Patel, Isaac
Hooper
|
Tel: +44 (0) 207 220 1666
|
|
|
Tennyson
Securities (Joint Broker)
Peter Krens
|
Tel: +44 (0) 207 186 9030
|
|
|
Stifel Nicolaus
Europe Limited (Joint Broker)
Ashton Clanfield, Callum Stewart
|
Tel: +44 (0) 20 7710 7600
|
|
|
Camarco
Andrew Turner, Violet Wilson, Sam
Morris
|
Tel: +44 (0) 203 757 4980
|
Notes to Editors:
i3 Energy is an oil and gas Company with a low
cost, diversified, growing production base
in Canada's most prolific hydrocarbon region,
the Western Canadian Sedimentary Basin and appraisal
assets in the North Sea with significant
upside.
The Company is well positioned to deliver future
growth through the optimisation of its existing high working
interest asset base and the acquisition of long life, low decline
conventional production assets.
i3 is dedicated to responsible corporate
practices and the environment, and places high value on adhering to
strong Environmental, Social and Governance ("ESG") practices. i3
is proud of its performance to date as a responsible steward of the
environment, people, and capital management. The Company is
committed to maintaining an ESG strategy, which has broader
implications for long-term value creation, as these benefits extend
beyond regulatory requirements.
i3 Energy is listed on the AIM market of
the London Stock Exchange under the symbol I3E and on
the Toronto Stock Exchange under the symbol ITE. For
further information on i3 Energy please
visit https://i3.energy/.
Cautionary Statements
Regarding Forward Looking Information
Certain statements and information contained in this
announcement and other continuous disclosure documents of the
Company referenced herein, including statements and information
that contain words such as "could", "should", "can", "anticipate",
"expect", "believe", "will", "may", "continue", "proposed" and
similar expressions relating to matters that are not historical
facts, constitute "forward-looking information" within the meaning
of applicable Canadian securities legislation. These statements and
information involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements and information. The Company believes the expectations
reflected in such forward-looking statements and information are
reasonable, but no assurance can be given that these expectations
will prove to be correct. Such forward-looking statements and
information included in this announcement should not be unduly
relied upon. These forward-looking statements and information speak
only as of the date of this announcement.
In particular, forward-looking information and
statements in this announcement include, but are not limited to the
following:
• the
expected timing of the Circular and of the results of the Company's
GM;
• the
anticipated benefits of the Capital Reduction;
•
expectations regarding proceedings before the Court in respect of
the Capital Reduction, including the timing of any required
approvals; and
• the
Company's expectations regarding its ability to create and increase
distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where
justified by the profits of the Company, or to allow the redemption
or buy-back of the Company's shares (or other distributions to
Shareholders).
The forward-looking information and statements made
in this announcement rely on certain expected economic conditions
and overall demand for the Company's services and are based on
certain assumptions. The assumptions used to generate this
forward-looking information and statements are, among other things,
that:
• the
Company will maintain its financial position and financial
resources will continue to be available to the Company;
•
demand for the Company's products and services will remain
consistent;
•
there will not be significant changes in the Company's financial
position due to pricing changes driven by market conditions,
competition, regulatory factors or other unforeseen factors;
and
• the
Company will obtain requisite approvals required to realize the
perceived benefits of the Capital Reduction.
Risks and other uncertainties that could cause actual
results to differ materially from those anticipated in such
forward-looking statements include, but are not limited to:
political and economic conditions; industry competition;
price fluctuations for oil and natural gas and related products and
services; the availability of future debt and equity financing;
changes in laws or regulations, including taxation and
environmental regulations which may adversely impact the Company;
extreme or unsettled weather patterns; and fluctuations in foreign
exchange or interest rates.
Readers are cautioned that the foregoing factors are
not exhaustive. Additional information on these and other factors
that could affect the Company's operations and financial results is
included in reports filed on the Company's website. The
forward-looking statements and information contained in this
announcement are expressly qualified by this cautionary statement.
The Company does not undertake any obligation to publicly update or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, except as
may be required by applicable securities laws.