TIDMIGAS
RNS Number : 7831Z
Igas Energy PLC
17 March 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION
OF
THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
17 March 2017
IGas Energy plc (AIM: IGAS)
("IGas" or the "Company")
Final terms of a proposed capital restructuring of the Company
and Trading Update
IGas, a leading UK onshore oil and gas explorer and producer,
today announces the final terms of a proposed capital restructuring
that the Company believes would will result in a new capital
structure which will be sustainable in the current oil price
environment such that the Company is well positioned to capitalise
on value accretive opportunities alongside its US$230 million
carried work programme.
Key highlights:
-- a proposed new equity fundraise to raise approximately US$55
million (equivalent to approximately GBP45.23m) from (a) a
subscription by a new investor, Kerogen; (b) a placing of shares
with institutional investors; (c) a subscription by certain of the
Directors, certain of their spouses and certain third parties;
-- a subscription by existing shareholders under an open offer for up to EUR5 million;
-- a debt for equity swap in respect of all the unsecured bonds
(through a bondholder vote); and a debt for equity swap in respect
of some of the secured bonds (through a voluntary equity exchange
and/or bondholder vote); the secured bonds will convert to equity
at 100% of par value and the unsecured bonds will convert to equity
at 62.5% of par value;
-- the Company has received signed undertakings to vote and
written indications of support in favour of the Bondholder Approved
Transactions from approximately 75% of the Secured Bondholders and
approximately 61% of the Unsecured Bondholders;
-- the Company's overall net debt reduced from US$122 million at
31 December 2016 (equivalent to GBP100m) to not more than US$10
million (equivalent to c.GBP8m) by the (i) cancellation of all of
the unsecured bonds (through a bondholder vote), (ii) a
cancellation of up to US$60m (equivalent to c.GBP49 m) of secured
bonds in consideration for the issue of new shares (through a
voluntary equity exchange and/or bondholder vote); and (iii) a
cancellation of part of the secured bonds following a re-purchase
in consideration for cash payments (through a voluntary cash offer
and/or a bondholder vote);
-- a renegotiated set of terms and conditions and covenants for
the secured bonds remaining after the debt for equity swap and cash
repurchase, which, in the opinion of the board of directors, would
give the Company capacity to operate on a sustainable basis and
advance the business with lower levels of financial constraint;
-- the new ordinary shares will be issued to new and existing
investors at the issue price of 4.5p; and
-- the placing will remain open for a short time after the time of this announcement.
Full details of the proposals (together the "Restructuring")
will be contained in a Circular to Shareholders and a Bond Summons
to Bondholders, to be published later today.
Commenting, Chief Executive Officer, Stephen Bowler said:
"We are pleased to announce the final terms of a restructuring
package which, together with our new strategic investor, Kerogen,
and the support of bondholders and shareholders would result in a
strong balance sheet that, in this oil price environment, would
enable us to focus on delivering the significant potential of our
production and development assets.
We are delighted with the support that we have received from
bondholders and from new investors coming in on the Placing and we
are also pleased to provide an opportunity for our existing
shareholders to participate at the same price, via the Open
Offer."
A copy of the Circular will be available later today on the
Company's website at
http://www.igasplc.com/investors/publications-and-reports
A copy of the Bond Summons will be available later today at
www.stamdata.com and
http://www.igasplc.com/investors/publications-and-reports
For further information please contact:
IGas Energy plc
Tel: +44 (0)20 7993 9899
Stephen Bowler, Chief Executive Officer
Julian Tedder, Chief Financial Officer
Ann-marie Wilkinson, Director of Corporate Affairs
Investec Bank plc (NOMAD and Joint Corporate Broker)
Tel: +44 (0)20 7597 4000
Sara Hale/Jeremy Ellis/George Price
Canaccord Genuity (Joint Corporate Broker)
Tel: +44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
Vigo Communications
Tel: +44 (0)20 7830 9700
Patrick d'Ancona/Chris McMahon
Background
The Company issued $165,000,000 of Secured Bonds in March 2013
and $30,000,000 of Unsecured Bonds in December 2013 when the price
of oil was c.US$110/bbl. Over the course of the last two years, the
Company has been de-leveraging its balance sheet through a
combination of farm outs and Bond buy backs as well as through the
amortisation of the Secured Bonds. As at 28 February 2017, net debt
was c.$120 million, comprising net Bonds outstanding of c.$151
million and cash of c.$30 million. Despite the oil price improving
considerably from lows in the first quarter of 2016 and the
de-leveraging of the Company's balance sheet, the Board considers
that significant corrections to the Company's capital structure
remain necessary to achieve a capital structure that is sustainable
in the current oil price environment, as well as enabling the
Company to capitalise on value accretive opportunities.
As has also been previously announced, the Company's current
forecasts project non-compliance with its leverage covenants as at
31 December 2016, when its financial statements are delivered. If
the Fundraising and Bondholder Transactions are approved, the
forecast leverage covenant breaches would be irrevocably remedied
or waived in full by the Secured Bondholders.
The principal purposes of the Fundraising and the Bondholder
Transactions are to (i) remedy the Company's forecast breach of its
daily liquidity covenants in late March 2017 when the next
amortisation and interest payment is due in respect of the Secured
Bonds; (ii) avoid the forecast leverage covenant breach; and (iii)
significantly de-leverage the Company by significantly reducing the
net debt of the Company. This will remove the risk of security
enforcement by Secured Bondholders and instead provide a stable
platform by extending the maturity of the Secured Bonds.
The Board is of the opinion that, if the Fundraising and the
Bondholder Approved Transactions are not approved, there would be
no alternative options for the Company to refinance and/or
restructure the Bonds prior to the event of default occurring as a
result of the breach of the liquidity covenant on or before 5 April
2017. Such an event of default cannot be remedied or waived without
the consent of the requisite majority of the Bondholders.
The Company has explored alternative restructuring options and
has not been able to obtain alternative funding from other sources.
Therefore, if the Fundraising and the Bondholder Approved
Transactions are not approved and the Restructuring does not take
place, any alternative restructuring solution (assuming no
enforcement action is taken by the Bondholders prior to such
restructuring) would likely result in no or little residual value
for the Shareholders.
In structuring the Fundraising and the Bondholder Transactions,
the Company has carefully considered the interests of all of its
stakeholders, in light of their relative priorities in the capital
structure.
General Meeting
The Directors do not currently have sufficient authority to
allot all of the Fundraising Shares required to effect the
Fundraising. Accordingly, the Board is seeking the approval of
Shareholders to allot the Fundraising Shares at the General
Meeting. The authorities granted to the Directors to allot shares
of the Company at the Annual General Meeting held on 25 May 2016
will be revoked pursuant to the Resolutions.
A notice convening the General Meeting, which is to be held at
the offices of Cooley (UK) LLP, Dashwood, 69 Old Broad Street,
London EC2M 1QS at 10.00 a.m. on 3 April 2017, will be sent out in
a circular to be despatched shortly. At the General Meeting, the
following Resolutions will be proposed:
-- Resolution 1 is an ordinary resolution to subdivide each of
the 303,305,534 Existing Ordinary Shares into one New Ordinary
Share and one Deferred Share;
-- Resolution 2, which is conditional on the passing of
Resolution 3, is an ordinary resolution to authorise the Directors
to allot relevant securities up to an aggregate nominal amount of
GBP3,600, being equal to 3,600,000,000 New Ordinary Shares (i.e.
the maximum number of New Ordinary Shares required to be issued
pursuant to the Fundraising); and
-- Resolution 3, which is conditional on the passing of
Resolution 2, is a special resolution to authorise the Directors to
issue and allot equity securities up to an aggregate nominal value
of GBP3,600, being equal to 3,600,000,000 New Ordinary Shares,
pursuant to the Fundraising on a non-pre-emptive basis.
The authorities to be granted pursuant to each of the
Resolutions will expire on the date falling six months from the
date of the passing of those Resolutions (unless renewed varied or
revoked by the Company before or on that date) and will also revoke
the Directors' authority to allot relevant securities granted at
the Company's annual general meeting held on 25 May 2016.
The Company has received irrevocable undertakings from the
Directors to vote in favour of the Resolutions in respect of
their respective entire holdings of Existing Ordinary Shares
representing, in aggregate, approximately 9.23 per cent. of the
Existing Ordinary Shares.
Kerogen Shares
Shareholders should also note that, following completion of the
Fundraising and Bondholder Transactions, the Kerogen Investor will
control approximately 28 per cent. of the voting rights of the
Company and that this will increase the percentage of the Ordinary
Shares that are not in public hands (as defined in the AIM Rules).
This may in turn have the effect of reducing the liquidity of
trading in the Ordinary Shares on AIM. Kerogen Investor's stake in
the voting rights of the Company will also mean that Kerogen
Investor will be able, if it so wishes, to exert significant
influence over resolutions proposed at future general meetings of
the Company. Although the Board does not believe that it is the
current intention of Kerogen Investor to seek a resolution at a
general meeting of the Company to de-list the Ordinary Shares from
AIM, Kerogen Investor could, if it so wishes in the future, call a
general meeting and seek to pass a special resolution to de-list
the Company. Kerogen Investor and the Company have also entered
into a relationship agreement (described further in paragraph 6,
below) which contains provisions designed to regulate the
relationship between the Company and Kerogen Investor.
Kerogen Investor has agreed to invest $35m to subscribe for New
Ordinary Shares issued by the Company at the Issue Price, or as
described in the paragraph below, resulting in an equity interest
of approximately 28% in the enlarged share capital immediately
following Admission, on the terms set out in this document and
conditional on, inter alia, the approval and implementation of the
Fundraising and the Bondholder Transactions (as applicable).
To the extent that immediately following Admission, were the
Kerogen Shares to represent less than 28% of the Ordinary Shares in
the Company, the Kerogen Investor may subscribe for additional New
Ordinary Shares at nominal value (i.e. at a price of 0.0001p each)
to ensure that Kerogen Investor holds approximately 28% of the
Ordinary Shares of the Company.
Current Trading and Prospects
Despite the challenging environment with prolonged oil price
volatility and post-Brexit currency swings, the Board has continued
to progress the business while significantly reducing its
operational costs and strengthening its balance sheet, as
exemplified by the conclusion of the farm-out arrangement with
INEOS Upstream Limited ("INEOS") in May 2015.
The Board believes that there is significant potential to both
replace the underlying decline and grow the Group's production in
the longer term, with a number of incremental opportunities
identified and five planning consents for future conventional
projects secured, including projects to monetise the Group's
stranded gas assets.
Production for the 2016 was c.2,355 boepd against guidance of
c.2,400-2,600 boepd and was impacted by two key factors. Firstly,
the Group reduced its capital expenditure budget in order to
preserve cash and focus on projects that maximised economic
benefits thereby delaying some planned production. In addition, the
Group had unplanned downtime as a number of wells were worked over
during the summer.
Revenue for the year was GBP30.5 million reflecting the
continuing low oil price environment, partially offset by the
strength of the US dollar. The price of Brent crude reached a low
of $27/bbl in January 2016 and a high of $55/bbl in December 2016,
with an average price of $44/bbl during the year. The Group's
average realised price for oil sales was $44.5/bbl pre-hedge and
$58.4/bbl post-hedge. Revenue in sterling terms was supported by
the decline in the GBP/USD exchange rate from GBP1:$1.50 at the
beginning of the year to GBP1:$1.23 in December 2016, following the
result of the EU referendum.
The Group continued to focus on improving efficiencies and
reducing costs across the business with 2016 operating costs per
boe of GBP21.1/boe ($28.8/boe), with the impact of lower production
on fixed costs partially offsetting overall savings. The Group
deferred a number of discretionary capital projects and focused on
initiatives to sustain production and boost recovery through
technical work programmes and the application of technology.
DeGolyer & MacNaughton ("D&M"), the leading
international reserves and resources auditors, completed an
independent evaluation of the Group's conventional and shale
interests as of 31 July 2016. D&M's estimates state an increase
in proven and probable reserves to 13.7 MMboe and for the first
time have included an estimate of shale gas risked prospective
resources of 2.5Tcf which in oil equivalent terms is c.440mmboe.
The estimate takes into account a recovery factor, adjustments for
productive areas and geological risk but even heavily risked this
is still a significant number for the Group and to give context, it
is a figure equivalent to almost the entire UK gas consumption for
a year.
The Group operates one of the largest net acreage positions in
the UK, with a total gross carried shale work programme as at 31
December 2016 of $230 million and continues to move its shale
development plan forward. In November 2016, following a
recommendation from the Planning Officer, Nottinghamshire County
Council's Planning and Licensing Committee granted planning
consent, subject to an agreement being reached with Nottinghamshire
County Council pursuant to section 106 of the Town and Country
Planning Act 1990 (as amended), for the application to develop a
hydrocarbon wellsite and drill up to two exploratory wells in
Misson Springs, North Nottinghamshire. We await determination on a
further site in North Nottinghamshire to drill a single exploration
well at a planning committee meeting to be held on 21 March
2017.
Following the final interpretation and assessment of the seismic
data from the North West survey, which helps identify the shale
potential within the survey area, the data is being utilised to
propose drilling locations and will allow us to firm up a future
development programme.
The Group was formally awarded 17 blocks, across nine PEDLs, in
the UK's 14th Onshore Oil and Gas Licensing round. The blocks,
across three key basins, represent a total gross area of c.257,000
acres; the Group's net interest is c.115,000 acres. As part of its
ongoing asset portfolio management, the Group has also relinquished
a number of licences in order to focus on core, high potential
areas with its partners. IGas now has an area of over 1 million
acres (gross) (c.0.63 million acres net) under licence.
Soon after taking office, the new Prime Minister lent her
support to recognising the increasing importance that energy and
infrastructure will play following the referendum. Home grown
energy is critical in this and UK shale will be an important
constituent in our energy mix and has the potential to create a
significant supply chain and create and protect thousands of jobs
in the UK.
The UK onshore industry has made good progress during 2016 with
a number of operators in addition to the Group being granted
planning permission to further shale appraisal.
In May 2016, Third Energy was granted permission for flow tests
at its existing KM8 well in Ryedale, Yorkshire. The decision was
challenged in court later in the year, but successfully upheld.
In October 2016, the long awaited decision by the Secretary of
State for Communities and Local Government was made in favour of
Cuadrilla's Preston New Road site. Initial work has now started at
the site and we look forward to seeing the results in due course.
INEOS has also announced the first of several screening
applications which will provide further forward momentum for the UK
shale industry.
As announced on 1 March 2017, the Company continues to hold
significant cash resources of US$31.8 million as at 28 February
2017, and had a total gross carried shale work programme of
c.US$230 million as at 31 December 2016.
The Group forecasts net production for 2017 to be c.2,500 boepd.
The Group has entered into put/call options to manage its commodity
price risk with outstanding contracts for 600,000 bbls in 2017,
representing c.65% of budgeted production, with downside protection
of c.$43/bbl.
Operating costs for 2017 are forecast at GBP18.5 million
resulting in an estimated US$ operating cost of $25/boe based on a
$1.25/GBP USD:GBP exchange rate. The 2017 capital expenditure
budget includes c.GBP40 million of carried expenditure to progress
our shale programme with a net cost to the Group of GBP1 million.
We plan to spend GBP4.2 million on our conventional assets during
2017, primarily to improve efficiency and sustain production
levels.
Details of the Bondholder Transactions
The Restructuring proposed by the Company includes the following
transactions in respect of the Bonds, all of which are
inter-conditional with the Fundraising (such that none of the below
transactions occur unless all of the below are implemented (except
that paragraph (b) and (d) may not be required depending on the
level of tenders made in paragraphs (a) and (c) below) and the
Fundraising Shares are issued and Admission occurs). Together the
transactions set out at paragraphs (a) to (i) are the "Bondholder
Transactions".
The Restructuring is conditional upon, inter alia, the general
meeting of shareholders of the Company having approved the
shareholder resolutions required in respect of the Restructuring,
the Secured Bondholder Approved Transactions being approved by the
Secured Bondholders, the Unsecured Bondholder Approved Transactions
being approved by the Unsecured Bondholders (as described below),
the Fundraising Shares being issued and Admission occurring. If
these conditions are satisfied, the Bondholder Transactions shall
take place in the order set out below on the Completion Date
(subject to the waivers being made on the terms set out below).
Waivers
The waivers set out in (f) and (h) below, if approved by both
the requisite majority of Secured Bondholders and Unsecured
Bondholders, shall take effect (on the terms set out in the
Bondholder Summons which shall prevail for the purposes of the
waivers) on 3 April 2017, provided that the waivers shall expire
(and the Bondholders' rights shall be re-instated in full) if the
general meeting of shareholders of the Company has voted not to
approve the shareholder resolutions required in respect of the
Fundraising or if the Restructuring has not completed on or before
the Longstop Date.
Secured Bonds
In order for the Restructuring to be implemented, the requisite
majority of Secured Bondholders (as further described below) shall
be required to approve the transactions set out at (b), (d), (e),
and (f) (the "Secured Bondholder Approved Transactions") and
individual Secured Bondholders may, at their discretion, take part
in the transactions set out at (a) and (c) below.
a) Voluntary Equity Exchange: the Company shall accept voluntary
offers made by Secured Bondholders to sell part or all of their
Secured Bonds to the Company and cancel them on the terms below
(the "Offered Bonds"):
(i) at a fixed all-in price of 100% of face value for every US$1
of face value of the Secured Bonds based on the Exchange Rate, with
no additional consideration being paid in respect of accrued
interest relating to the period from and including 22 March
2017;
(ii) in consideration for the issue by the Company of New
Ordinary Shares at the Issue Price, for up to US$60 million of face
value of the Secured Bonds (the "Maximum Equity Conversion
Amount");
(iii) only valid offers for the exchange of sufficient Offered
Bonds to ensure that the aggregate value of the New Ordinary Shares
to be allotted and issued to the relevant Offering Secured
Bondholders (as defined below) at the Issue Price will be equal to
or greater than US$110,000 (calculated to be in excess of
EUR100,000 on the basis of an agreed exchange rate of 1 EUR:1.0613
USD) (the "Minimum Tendering Amount") shall be accepted by the
Company;
(iv) to the extent that the aggregate face value of all the
Offered Bonds of any or all of the Secured Bondholders (the
"Offering Secured Bondholders") is equal to or below US$50 million
less an amount equal to 50% of the proceeds of the Placing and
Ancillary Subscription (the "Secured Bond Conversion Minimum"), the
Company shall accept such offers in full (on the terms described
above);
(v) to the extent that the aggregate face value of all the
Offered Bonds of any or all of the Offering Secured Bondholders
exceeds the Secured Bond Conversion Minimum, the Company shall not
be obliged to but may elect, in its absolute discretion, to accept,
in part or in full, such offers (on the terms described above) up
to the Maximum Equity Conversion Amount. If the Company accepts
such offers in part, it will first accept Offered Bonds with a face
value equal to the Minimum Tendering Amount from each Offering
Secured Bondholder, and thereafter it shall accept Offered Bonds on
a pro rata basis from each Offering Secured Bondholder, in the
proportion borne by the balance of its Offered Bonds to the balance
of the aggregate Offered Bonds of all Offering Secured Bondholders
(in each case after deduction of the Minimum Tendering Amount).
Notwithstanding the above, in the highly unlikely event that the
Maximum Equity Conversion Amount is not sufficient to accept
Offered Bonds with a face value equal to the Minimum Tendering
Amount from all Offering Secured Bondholders, the Company will
select those Offering Secured Bondholders from whom it will accept
Offered Bonds with a face value equal to the Minimum Tendering
Amount by drawing lots and only those selected by drawing lots and
who have tendered the Minimum Tendering Amount shall be selected;
and
(vi) all Secured Bonds purchased by the Company in this
Voluntary Equity Exchange shall be released and cancelled in full
(the "Cancelled Offered Bonds").
b) Conditional Secured Debt for Equity Swap: if the aggregate
face value of the Cancelled Offered Bonds is less than the Secured
Bond Conversion Minimum, the Company shall:
(i) purchase and cancel in full Secured Bonds with a total
aggregate face value (and waive all interest accrued thereon
relating to the period from and including 22 March 2017 on such
Secured Bonds) in an amount equal to the shortfall, being the
difference between the face value of the Cancelled Offered Bonds
and the Secured Bond Conversion Minimum,
(ii) in respect of the shortfall in (i) above, purchase and
cancel in full such Secured Bonds in consideration for the issue by
the Company of New Ordinary Shares at the Issue Price to the
Secured Bondholders at a fixed all-in price of 100% of face value
for every US$1 of face value of Secured Bonds purchased and
cancelled, based on the Exchange Rate, on a pro rata basis and in
respect of each such Secured Bondholder (excluding the Company as
Secured Bondholder), in the proportion borne by its Secured Bonds
(excluding the Cancelled Offered Bonds and the Company Bonds) to
all Secured Bonds (excluding the Cancelled Offered Bonds and the
Company Bonds). There shall be no Minimum Tendering Amount in
respect of the Conditional Secured Debt for Equity Swap.
c) Voluntary Cash Offers: the Company shall accept voluntary
offers made by Secured Bondholders to sell part or all of their
Secured Bonds to the Company and cancel them on the terms below
(the "Cash Offered Bonds"):
(i) at a fixed all-in price of 100% of face value for every US$1
of face value of the Secured Bonds, with no additional
consideration being paid in respect of accrued interest relating to
the period from and including 22 March 2017 on such Secured
Bonds;
(ii) in consideration for cash;
(iii) to the extent that the aggregate face value of all the
Cash Offered Bonds offered for purchase and cancellation by any or
all of the Secured Bondholders (the "Cash Offering Secured
Bondholders") is equal to or below the Secured Bond Cash
Cancellation Minimum the Company shall accept the Cash Offered
Bonds in full (on the terms described above);
(iv) to the extent that the aggregate face value of the Cash
Offered Bonds offered for sale by any or all of the Cash Offering
Secured Bondholders exceeds the Secured Bond Cash Cancellation
Minimum, and would, if accepted, not require more than the Excess
Cash Amount (as defined below) to be paid to such Offering Secured
Bondholders, the Company shall accept the Cash Offered Bonds in
excess of the Secured Bond Cash Cancellation Minimum in full (on
the terms described above);
(v) to the extent that the aggregate face value of the Cash
Offered Bonds exceeds the Secured Bond Cash Cancellation Minimum
and would, if accepted, require more than the Excess Cash Amount to
be paid to such Cash Offering Secured Bondholders, the Company
shall not be obliged to but may elect, in its absolute discretion,
to accept, in full or in part, such offers in excess of the Excess
Cash Amount on the terms described above. To the extent that the
Company accepts any offers in part, it shall do so on a pro rata
basis, in respect of each Cash Offering Secured Bondholder, in the
proportion borne by its Cash Offered Bonds to the aggregate of all
Cash Offered Bonds and accepted; and
(vi) all Secured Bonds purchased by the Company shall be
released and cancelled in full (the "Cash Cancelled Offered
Bonds").
For the purposes of the Voluntary Cash Offer described above,
the Secured Bond Cash Cancellation Minimum shall mean:
(A) US$30 million (face value); or
(B) if the amount of the Secured Bonds tendered and accepted
through the Voluntary Equity Exchange exceeds the Secured Bond
Conversion Minimum, US$30 million less 50% of such excess.
Excess Cash Amount means the total net proceeds of the Placing
and the Ancillary Subscription.
d) Conditional Cash Cancellation: if the aggregate face value of
the Cash Cancelled Offered Bonds is less than the Secured Bond Cash
Cancellation Minimum, the Company shall:
(i) purchase and cancel in full an amount of Secured Bonds (and
waive all accrued interest thereon relating to the period from and
including 22 March 2017) with a total aggregate face value equal to
the shortfall, being the difference between the face value of the
Cash Cancelled Offered Bonds and the Secured Bond Cash Cancellation
Minimum,
(ii) in respect of the shortfall in (i) above, purchase and
cancel in full such Secured Bonds in consideration for the payment
(in cash) by the Company to the Secured Bondholders at a fixed
all-in price of 100% of par value of the Secured Bonds purchased
and cancelled, on a pro rata basis, in respect of each such Secured
Bondholder (excluding the Company as Secured Bondholder), and in
the proportion borne by its Secured Bonds (excluding the Cancelled
Offered Bonds and the Cash Cancelled Offered Bonds) to all Secured
Bonds (excluding the Cancelled Offered Bonds and Cash Cancelled
Offered Bonds and the Company Bonds).
e) Amendments to the terms of the remaining Secured Bonds: a
resolution of at least 662/3% of the Voting Bonds of the Secured
Bonds (represented at the Bondholder Meeting) shall authorise the
Bond Trustee to amend the balance of the Secured Bonds remaining
following the transactions listed above and a summary of the
amendments are set out below (together, the "Bond Agreement
Amendments") (all terms below shall have the meaning given to them
in the Amended Secured Bond Agreement):
-- Term extended to 30 June 2021;
-- Interest 8% p.a. (effective from and including 22 March 2017)
payable each 6 months on 22 September and 22 March each year;
-- Amortisation year 1: 2.5% (outstanding principal amount at
the Completion Date following cancellation of the Company Bonds)
payable on 22 September 2017 and 22 March 2018;
-- Amortisation year 2 onwards: 5% (outstanding principal amount
at the Completion Date following cancellation of the Company Bonds)
payable each 6 months on 22 September and 22 March each year;
-- Repayment in full at maturity: outstanding balance repayable at maturity;
-- Amortisation suspended if Brent Crude oil price is less than
US$50 per barrel (calculated by reference to the average Brent
Crude price in 6 months period to the interest payment date
immediately preceding the amortisation payment date);
-- Liquidity: maintains Liquidity of US$7.5 million;
-- Leverage Ratio: maintains a Leverage Ratio of not more than 3.5;
-- No other financial covenants;
-- Debt service retention account removed and amounts released to Company;
-- No minimum investment requirement in hydrocarbon assets,
mandatory redemption offer in respect of capital expenditure
removed;
-- More flexibility on disposal of business, mandatory offer in
respect of disposal proceeds to be set at a threshold of US$20
million with 50% of net proceeds in excess of this to be offered to
the remaining Secured Bondholders for redemption at par;
-- More flexibility in respect of the negative pledge;
-- Amendments to hedging requirements;
-- Amendments to change of control put option to allow the
Kerogen Investor (and associates) to hold more than 30% of the
Ordinary Shares/voting rights in the Company but no more than 35%;
and
-- All prepayment premia to be removed. Prepaid amounts to be applied in order of maturity.
f) Waivers: the Secured Bondholders shall agree to the waivers
on the terms set out in the Bondholder Summons (including waivers
in respect of any interest accrued under the Secured Bonds from and
including 22 March 2017 to the Completion Date and of certain
defaults occurring under the Secured Bond Agreement on or before
the Completion Date).
Interest on Secured Bonds
The accrued interest and amortisation payment due on 22 March
2017 in respect of the Secured Bonds shall be paid in cash in full
(at 100% of nominal value) by the Company on its due date.
Unsecured Bonds
In order for the Restructuring to be implemented, the requisite
majority of the Unsecured Bondholders (as further described below)
shall be required to approve the transactions set out at (g) and
(h) (the "Unsecured Bondholder Approved Transactions").
g) Unsecured Debt for Equity Swap: the Company shall:
(i) purchase and cancel in full all of the Unsecured Bonds in
consideration for the issue by the Company of New Ordinary Shares
at the Issue Price to the Unsecured Bondholders at a fixed price of
60% of face value for every US$1 of face value of Unsecured Bonds
(excluding the Company Bonds) cancelled, based on the Exchange
Rate;
(ii) waive any accrued and unpaid interest on the Unsecured
Bonds to the Completion Date in consideration for the issue by the
Company of New Ordinary Shares at the Issue Price to the Unsecured
Bondholders which correspond to a value equivalent to 2.5% of the
face value of the Unsecured Bonds (excluding the Company Bonds),
based on the Exchange Rate,
on a pro rata basis, in respect of each Unsecured Bondholder
(excluding the Company as an Unsecured Bondholder), in the
proportion borne by its Unsecured Bonds (excluding the Company
Bonds) to the aggregate of all Unsecured Bonds (excluding the
Company Bonds).
h) Waivers: the Unsecured Bondholders shall agree to the waivers
on the terms set out in the Bondholder Summons (including waivers
in respect of any interest accrued but unpaid to the Completion
Date and of certain defaults occurring under the Unsecured Bond
Agreement on or before the Completion Date).
Cancellation of Company held Bonds for no consideration
i) The Secured Bonds and Unsecured Bonds held by the Company
(the "Company Bonds") shall be cancelled in full for nil
consideration and excluded from all of the Bondholder
Transactions.
Settlement of the Voluntary Cash Offer and Conditional Cash
Cancellation
Save as set out in the Voluntary Cash Offer, the Company may
elect, at its discretion, to fund the Voluntary Cash Offer and/or
the Conditional Cash Cancellation from the proceeds of the Kerogen
Subscription, the Ancillary Subscription, the Placing, the Open
Offer and/or cash in the business.
Equity Ownership Limit
To the extent that any Bondholder would receive more than 24.9%
of the Enlarged Share Capital, the Company will only issue New
Ordinary Shares to such Bondholder to the extent that it would not
result in such Bondholder holding in excess of 24.9% of the
Enlarged Share Capital. Such Bondholder(s) will be entitled to
nominate other entities to receive the excess New Ordinary Shares
that could not be allocated to them as a consequence of the
restriction set out above.
Board position
The Company has agreed that the largest holder by face value of
the Secured Bonds, Trans European Oil & Gas Luxco II S.a.r.l.
("TEOG") shall have the right, conditional upon Admission, to
appoint one director to the Board for so long as TEOG and/or any
entity or entities controlled directly or indirectly by TEOG's
parent or Kohlberg Kravis Roberts, in aggregate, hold 10 per cent.
or more of the Enlarged Share Capital. The exercise of the right to
appoint any person as a director is subject to the Company's
nominated adviser being in a position to confirm, having undertaken
its customary due diligence in respect of the proposed director,
that such person is suitable to be a director of a UK public
company.
Approvals required for the Bondholder Approved Transactions
The Fundraising is, inter alia, conditional on the requisite
majority of Secured Bondholders at a bondholder's meeting
consenting to the Secured Bondholder Approved Transactions and the
requisite majority of Unsecured Bondholders at a bondholder's
meeting consenting to the Unsecured Bondholder Approved
Transactions, for which separate votes will be held pursuant to the
terms of the Bondholder Summons.
To approve the Bondholder Approved Transactions, Bondholders
representing at least 662/3% of the Secured Bonds (excluding the
Company Bonds) represented at the Bondholder Meeting and 662/3% of
the Unsecured Bonds (excluding the Company Bonds) represented at
the Bondholder Meeting must vote in favour of the Bondholder
Resolutions set out in the Bondholder Summons. In order to be
quorate, at least 50% of the Secured Bondholders and Unsecured
Bondholders must vote in person or by proxy at the Bondholder
Meeting.
The Fundraising is conditional upon and the Bondholder
Transactions (as applicable) will only become effective if the
Secured Bondholders consent to the Secured Bondholder Approved
Transactions and the Unsecured Bondholders consent to the Unsecured
Bondholder Approved Transactions and are conditional, inter alia,
upon the completion of the Fundraising and Admission.
Completion Date
Assuming that the Bondholder Approved Transactions are duly
approved by the requisite majority of Bondholders and subject to,
inter alia, the completion of the Fundraising and Admission, the
Bondholder Transactions (as applicable) will be formally
implemented on the Completion Date in the order described
above.
Debt structure of the Company upon completion of the
Restructuring
Completion of the proposed Fundraising and Bondholder
Transactions (as applicable) would, if they are implemented in
full, result in a reduction of net debt from c.US$120 million to
not more than US$10 million following Admission.
Details of the Kerogen Subscription
Information about Kerogen
Kerogen Capital is an independent private equity fund manager
established in 2007 specialising in the international oil and gas
sector. It provides expansion and development capital to
established junior oil and gas companies and has a strategy of
partnering with management teams which have a competitive advantage
in a particular area of technical expertise.
Kerogen Capital manages approximately US$1.9 billion of capital
commitments across three funds and their related parallel and
co-investment funds. Kerogen Capital's investors comprise a range
of blue-chip institutions including endowment funds, foundations,
pension plans, funds of funds, international corporations and
family offices.
The team at Kerogen Capital comprises highly experienced
investment professionals as well as in-house technical and
operations expertise in the oil and gas industry. Together with its
Executive Board, Kerogen Capital seeks to support and assist its
portfolio companies in delivering the full potential of their
assets.
Kerogen Subscription Agreement
The Kerogen Subscription Agreement contains certain warranties
given by the Company in favour of Kerogen Investor in relation to,
inter alia, the accuracy of the information in this announcement
and other matters relating to the Group and its business and
certain customary warranties given by Kerogen Investor in favour of
the Company.
Kerogen Relationship Agreement
Kerogen Investor and the Company have also entered into a
relationship agreement (the "Relationship Agreement"). The
Relationship Agreement is conditional on Admission taking place no
later than 8.00 a.m. on 4 April 2017 (or such later date as the
parties may agree, being not later than 28 April 2017) and will
remain in force, for so long as the Ordinary Shares are admitted to
trading on AIM and Kerogen Group holds 10 per cent. or more of the
voting rights of the Ordinary Shares in issue from time to
time.
The Relationship Agreement provides that:
(a) For so long as the Kerogen Investor and its associates (the
"Kerogen Group") hold 10 per cent or more of the voting rights of
the Ordinary Shares in issue from time to time, the Kerogen
Investor undertakes (i) not to take any action so as to prevent the
Group from carrying on its business independently of the Kerogen
Group; (ii) to conduct all transactions with members of the Group
on an arm's length basis and normal commercial terms; (iii) not to
take any action to prevent the Company from complying with its
legal and regulatory obligations; and (iv) not to take any action
to prevent the business and affairs of the Company from being
conducted in accordance with its articles of association;
(b) for so long as the Kerogen Group holds 20 per cent or more
of the voting rights of the Ordinary Shares in issue from time to
time, Kerogen Investor has the right to nominate two Directors to
the Board (each a "Nominated Director"). The appointment of any
Nominated Director shall be subject to the prior consultation with
the Company's nominated adviser, to enable the Nominated Advisor to
conduct reasonable due diligence on the proposed Nominated
Director;
(c) in the event that the percentage holding of the Kerogen
Group drops to below 20 per cent but stays above 10 per cent,
Kerogen Investor will retain the right to appoint at least one
Nominated Director; and
(d) Kerogen Investor also has the right to nominate a Nominated
Director to each of the existing Committees of the Board;
(e) the Company will also establish a technical and operating
committee (the "TechCom") whose purpose will be to review and
consider technical and operational matters, together with other
risk issues, before they are presented to the Board of Directors.
Technical and operating matters shall include (without
limitation):
(i) Review of any new projects or acreage;
(ii) Review of any key operating activities including G&G
programmes, drilling and testing activities, field development
plans, etc; and
(iii) Review of operational and financial performance (such as
KPIs, HSE metrics, operating and other costs, and performance
against budgets); and
(f) for so long as the Kerogen Group owns more than 10% of the
ordinary share capital of IGas, Kerogen Investor shall be permitted
to nominate 2 representatives to the TechCom.
As explained above, the final percentage of New Ordinary Shares
that will be held by Kerogen Investor on Admission cannot be
ascertained at the date of this announcement as the numbers of New
Ordinary Shares to be issued pursuant to the Ancillary
Subscription, Placing, Open Offer and the Bond Equity Exchange will
not be known until those offer processes are completed.
Details of the Ancillary Subscription
Certain Directors, certain of their spouses and certain third
parties have entered into subscription letters with the Company to
subscribe for a total of 22,319,232 New Ordinary Shares at the
Issue Price.
The Directors listed in the table below have conditionally
agreed to subscribe for a total of GBP914,366 in the Ancillary
Subscription, representing 20,319,232 New Ordinary Shares, in the
amounts set out next to their names. The Directors have irrevocably
agreed to not to take up their Open Offer Entitlements.
Cuth McDowell has not subscribed under the Ancillary
Subscription for New Ordinary Shares but instead has undertaken to
tender US$240,000 of Secured Bonds in the Voluntary Equity Exchange
and accordingly expects to acquire up to 4,383,441 New Ordinary
Shares in connection with the proposed Bondholder Transactions.
The Ancillary Subscription is conditional upon, inter alia, the
Bondholder Resolutions being passed (and the Bondholder
Transactions (as applicable) becoming effective), the passing of
the Resolutions at the General Meeting and the Kerogen Subscription
Agreement and the Placing and Open Offer Agreement each becoming
unconditional in all respects.
The Ancillary Subscription Shares will, upon issue, rank pari
passu with the other Fundraising Shares and all of the New Ordinary
Shares in issue.
As at the date of Immediately following
this announcement Admission*
No. of Existing % of Existing No. of % of
Ordinary Shares Ordinary Ordinary Enlarged
Shares Shares Share
Capital
F Gugen 27,615,764 9.13 31,268,331 1.32
S Bowler 116,490 0.04 1,116,490 0.05
J Blaymires** 66,573 0.02 733,239 0.03
J Tedder 146,206 0.05 2,368,428 0.10
J Bryant 59,045 0.02 1,725,711 0.07
C McDowell 4,383,441
R McTighe - - 11,111,111 0.18
- - 0.47
* Assuming that the Open Offer is fully subscribed and the
maximum number of New Ordinary Shares are issued under the Bond
Equity Exchange, the Directors do not participate in the Open
Offer, certain Directors participate in the Ancillary Subscription
and no options or warrants are exercised prior to Admission
** of which 333,333 New Ordinary Shares have been subscribed for
by, and will be held by, his wife, Melanie Blaymires
Details of the Placing
The Joint Brokers are conditionally placing New Ordinary Shares
at the Issue Price with institutional and other investors to raise
approximately US$20m (when aggregated with the Ancillary
Subscription).
The Issue Price of 4.5 pence represents a discount of
approximately 11.5 per cent. to the middle market closing price of
the Company's Existing Ordinary Shares on 16 March 2017 (being the
latest practicable date before publication of this announcement)
which was 5.08 pence.
The Placing is conditional upon, inter alia, the Bondholder
Resolutions being passed (and the Bondholder Transactions (as
applicable) becoming effective), the passing of all Resolutions at
the General Meeting and the Kerogen Subscription Agreement, the
Ancillary Subscription and the Placing and Open Offer becoming
unconditional in all respects.
The Placing Shares will, upon issue, rank pari passu with the
other Fundraising Shares and the other New Ordinary Shares.
The Placing and Open Offer Agreement contains customary
warranties given by the Company in favour of the Joint Brokers in
relation to, inter alia, the accuracy of the information in this
announcement and matters relating to the Group and its business. In
addition, the Company has agreed to indemnify the Joint Brokers in
relation to certain liabilities which the Joint Brokers may incur
in respect of the Fundraising.
The Joint Brokers have the right to terminate the Placing and
Open Offer Agreement in certain circumstances prior to Admission,
in particular, in the event of breach of any of the warranties or a
material adverse change.
The Placing and Open Offer Agreement also provides for the
Company to pay all costs, charges and expenses of, or incidental
to, the Fundraising and Admission including all legal and other
professional fees and expenses.
The Placing will remain open for a short time after the
publication of this announcement
The full terms and conditions of the Placing are set out in the
Appendix to this announcement.
Principal terms of the Open Offer
Subject to the fulfilment of the conditions set out below,
Qualifying Shareholders are being given the opportunity to
subscribe for the Open Offer Shares at a price of 4.5 pence per
Open Offer Share, pro rata to their holdings of Existing Ordinary
Shares on the Record Date on the basis of:
3 Open Offer Shares for every 10 Existing Ordinary Shares
Open Offer Entitlements will be rounded down to the nearest
whole number of Open Offer Shares.
If the participants in the Ancillary Subscription have agreed
not to take up their entitlements (if any) in the Open Offer to
maximise the number of Open Offer Shares available for subscription
by the remaining Qualifying Shareholders.
Qualifying Shareholders are also being given the opportunity,
provided that they take up their Open Offer Entitlements in full,
to apply for Excess Shares through the Excess Application Facility.
The Open Offer Shares will be allotted and issued conditional upon,
inter alia, the Bondholder Transactions, the Kerogen Subscription
Agreement, the Ancillary Subscription Letters and the Placing and
Open Offer Agreement having become unconditional in all respects
and not having been terminated in accordance with their respective
terms. The Open Offer is not underwritten. Accordingly, if the Open
Offer does not become unconditional, no Open Offer Shares will be
issued and all monies received by the Registrars will be returned
to the applicants (at the applicants' sole risk), without payment
of interest, as soon as practicable following the lapse of the Open
Offer.
Full details of the Open Offer and the terms and conditions on
which it is being made, including the procedure and payment, will
be set out in a circular to Shareholders to be despatched
shortly.
Assuming full take-up under the Open Offer, the issue of the
Open Offer Shares will raise further gross proceeds of
approximately GBP4.095 million (being less than EUR5 million) for
the Company.
Excess Application Facility
The Excess Application Facility will enable Qualifying
Shareholders, provided that they take up their Open Offer
Entitlement in full, to apply for Excess Shares. The amount of
Excess Shares is uncapped so that Qualifying Shareholders may apply
for as many Excess Shares as they wish to take up, in the event
that total applicants exceed the maximum number of New Ordinary
Shares available in the Open Offer, on a scaling back and
allocation at the Director's absolute discretion will be
applied.
Conditions and other information relating to the Fundraising
The Fundraising is conditional, inter alia, upon:
a) the passing of all of the Resolutions at the General Meeting;
b) the passing of the Bondholder Resolutions;
c) the Secured Bond Amendment and Restatement Agreement becoming
unconditional in all respects (save for the condition relating to
Admission);
d) the Kerogen Subscription Agreement becoming unconditional in
all respects (save for the condition relating to Admission) and not
having been terminated in accordance with its terms;
e) the Ancillary Subscription Letters becoming unconditional in
all respects (save for the condition relating to Admission) and not
having been terminated in accordance with their terms;
f) the Placing and Open Offer Agreement becoming unconditional
in all respects (save for the condition relating to Admission) and
not having been terminated in accordance with its terms; and
g) Admission becoming effective by no later than 8.00 a.m. on 4
April 2017, or such later date as may be agreed between the Company
and each of the other parties to both the Subscription Agreement
and the Placing and Open Offer Agreement, being not later than
8.00a.m. on 28 April 2017.
Accordingly, if any such conditions are not satisfied, or, if
applicable, waived (save that (a), (b) and (g) above cannot be
waived), no part of the Fundraising or Bondholder Transactions will
proceed. If the Open Offer does not proceed, any applications made
by Qualifying Shareholders will be rejected and application monies
will be returned without payment of interest as soon as
practicable.
The Fundraising will result in the issue of, in total, up to
2,708,403,235 New Ordinary Shares assuming full take up under the
Open Offer and assuming the maximum number of New Ordinary Shares
are issued pursuant to the Bond Equity Exchange. The Fundraising
Shares, will be issued credited as fully paid, and will rank pari
passu in all respects with the New Ordinary Shares and therefore
rank equally for all dividends or other distributions declared,
made or paid after the date of issue of the Fundraising Shares. No
temporary documents of title will be issued.
Following the issue of the Fundraising Shares pursuant to the
Fundraising (and assuming that the Open Offer is taken up in full
and assuming the maximum number of New Ordinary Shares are issued
pursuant to Bond Equity Exchange), Qualifying Shareholders who take
up their full Open Offer Entitlements (excluding, for the avoidance
of doubt, any Open Offer Shares acquired through the Excess
Application Facility) in respect of the Open Offer will undergo a
dilution of up to 87 per cent. to their interests in the Company
due to the issue of the Fundraising Shares. Qualifying Shareholders
who do not take up any of their Open Offer Entitlements in respect
of the Open Offer will experience a more substantial dilution to
their interests in the Company because of the Fundraising.
Use of proceeds
The Kerogen Subscription, the Ancillary Subscription, the
Placing and Open Offer will strengthen the Company's balance sheet,
enabling the restructuring of its bonds to take place and thereby
providing financial flexibility and right sizing its capital
structure for the current oil price environment.
The use of proceeds from the Kerogen Subscription, the Ancillary
Subscription, the Placing and the Open Offer is not restricted and
the Company may use such proceeds at its own discretion, save that
some or all of such proceeds and/or forecast cashflows from the
Company's asset base, will be used to give effect to the Bondholder
Transactions (in particular the Voluntary Cash Offer and the
Conditional Cash Cancellation).
Thereafter, the remaining proceeds of the Fundraising and
cashflow shall be used to fund expenditure to develop and extract
further value from the Group's conventional hydrocarbon assets and
progress its unconventional hydrocarbon assets. The Company has
identified a number of opportunities to increase production across
its existing conventional portfolio including investment in oil
behind pipe, gas monetisation and water flood opportunities with
the potential to increase production by c.320 boepd (net of
decline) by the end of 2018.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2017
Record Date and time for entitlements under the Open Offer 6.00
p.m. on 17 March
Posting of the circular (including the Notice of General
Meeting),
Application Form and Proxy Forms 17 March
Existing Ordinary Shares marked 'ex' by the London Stock
Exchange 8.00 a.m. on 20 March
Open Offer Entitlements and Excess Open Offer Entitlements
credited to stock
accounts in CREST of Qualifying CREST Shareholders 20 March
Recommended latest time for requesting withdrawal of Open
Offer
Entitlements and Excess Open Offer Entitlements from CREST 4.30
p.m. on 27 March
Latest time for depositing Open Offer Entitlements and
Excess Open Offer Entitlements into CREST 3.00 p.m. on 28
March
Latest time for splitting of Application Forms (to satisfy
bona
fide market claims only) 3.00 p.m. on 29 March
Latest time for receipt of completed Application Forms and
payment in full under the Open Offer or settlement of
relevant CREST instruction (as appropriate) 11.00 a.m. on 31
March
Latest time for receipt of proxy forms for use at the General
Meeting 10.00 a.m. on 1 April
General Meeting 10.00 a.m. on 3 April
Announcement of results of General Meeting through RNS 3
April
Record date for the Subdivision 3 April
Bondholder Meeting 3 April
Announcement of results of Bondholder Meeting through RNS
3 April
Results of Open Offer announced through RNS 3 April
Admission and commencement of dealings in Open Offer Shares,
Kerogen Shares, Placing Shares, Ancillary Subscription Shares
and
Bond Equity Exchange Shares 8.00 a.m. on 4 April
Open Offer Shares to be held in uncertificated form
credited to CREST stock accounts 4 April
Despatch of definitive share certificates for Open Offer
Shares
to be held in certificated form Within ten days of Admission
If any of the details contained in the timetable above should
change, the revised times and dates will be notified by means of an
announcement through a Regulatory Information Service.
Certain of the events in the above timetable are conditional
upon, amongst other things, the approval of the Resolutions to be
proposed at the General Meeting.
All references are to London time unless stated otherwise.
Glossary
Euros or EUR The lawful currency of the European Union
sterling, pounds sterling, GBP,
pence or p The lawful currency of the United Kingdom
Dollars, US dollars, $, US$ or cents The lawful currency of the United States of America
2P Best estimate of commercially recoverable reserves
boepd Barrels of oil equivalent per day
Hydraulic Fracturing Hydraulic Fracturing or 'fraccing' as it
has become known is the process by which gas or oil can be
extracted from impermeable rock. For shale oil or gas, the rock is
fractured by injecting water at high pressure, an established
technique for conventional oil and gas, but used more intensively
for shale. Small particles (usually sand) are pumped into the
fractures to keep them open when the pressure is released, so gas
can flow into the well. 98-99% of the mixture is water and sand.
Small quantities of chemicals are normally added to improve
efficiency, for example by reducing friction. Once the rock is
fractured, some of the fluid returns to the surface, where it is
sealed in containers before treatment. The gas or oil can then flow
through the well to surface operations which separate and process
the gas or oil.
MMboe Millions of barrels of oil equivalent
APPIX
TERMS AND CONDITIONS
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
Details of the Placing
The Joint Brokers have entered into an agreement with IGas under
which, subject to the conditions set out in that agreement, the
Joint Brokers have agreed, as agents for and on behalf of the
Company, to use reasonable endeavours to procure subscribers for
the Placing Shares at a price of 4.5p per Placing Share.
Each of the Joint Brokers is acting severally and not jointly
and severally as agent of IGas in the Placing.
Each Placee's allocation of Placing Shares will be agreed
between the relevant Joint Broker and each Placee orally as agent
of IGas, and such oral agreement will be confirmed shortly
thereafter by the relevant Joint Brokers to Placees. The oral
commitment provided by Placees will constitute an irrevocable
legally binding contract by that Placee in favour of the relevant
Joint Broker and IGas to subscribe for the number of Placing Shares
allocated to it at the Issue Price on the terms and conditions set
out in this Appendix and in accordance with IGas' memorandum and
articles of association.
Each Placee will, pursuant to its oral commitment, have a
separate irrevocable and binding obligation owed to the relevant
Joint Broker as agent of IGas to pay the relevant Joint Broker (or
as it may direct) in cleared funds, an amount equal to the product
of the Issue Price and the number of Placing Shares, such Placee
has agreed to subscribe and IGas has agreed to allot and issue to
that Placee. Settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the same
time, on the basis explained below under "Registration and
Settlement".
All obligations under the Placing will be subject to fulfilment
of the conditions referred to below under "Conditions of the
Placing" and to the Placing not being terminated on the basis
referred to below under "Termination of the Placing". By agreeing
to become a Placee, each Placee agrees that its rights and
obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission
or termination by the Placee.
To the fullest extent permissible by law, none of the Joint
Brokers nor any of their respective affiliates shall have any
liability to Placees (or to any other person whether acting on
behalf of a Placee or otherwise). In particular, none of the Joint
Brokers nor any of their respective affiliates shall have any
liability (including to the fullest extent permissible by law, any
fiduciary duties) in respect of the Placing.
No commissions will be paid to Placees or by Placees in respect
of any Placing Shares.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the Ordinary Shares
including the right to receive all dividends and other
distributions declared in respect of such Ordinary Shares after the
date of issue of the Placing Shares.
As part of the Placing, IGas has agreed that it will not issue
or sell any Ordinary Shares for a period of 180 days after
Admission, without the prior consent of the Joint Brokers, such
consent not to be unreasonably withheld or delayed. This agreement
does not however prevent IGas from granting or satisfying exercises
of options granted pursuant to existing employee share schemes of
IGas or in accordance with compensation arrangements for
non-executive directors pursuant to normal practice.
Application will be made to the London Stock Exchange for
admission of the Placing Shares to trading on AIM. It is expected
that Admission of the Placing Shares will become effective
following the General Meeting on or around 3 April 2017 and that
dealings in the Placing Shares will commence at that time.
Conditions of the Placing
The obligations of the Joint Brokers under the Placing and Open
Offer Agreement are conditional on, amongst other things:
(a) the passing of the Resolutions by the requisite majority
without material amendment at the General Meeting (or at any
adjournment thereof);
(b) the passing of the Bondholder Resolutions by the requisite
majorities without material amendment at the Bondholder Meetings
(or any adjournment thereof) and the amendments to the Bonds
becoming effective through the execution of the Bond Agreements by
the parties thereto, and the Bond Agreements becoming unconditional
in all respects (save for Admission);
(c) the Kerogen Subscription Agreement having become
unconditional in all respects (save for Admission), not having been
terminated in accordance with its terms, and the Company's
Solicitors holding the subscription monies payable thereunder in
escrow subject to Admission);
(d) each of the Ancillary Subscription Letters having become
unconditional in all respects (save for Admission), not having been
terminated in accordance with its terms and the Company's
Solicitors holding the subscription monies payable thereunder in
escrow, subject to Admission);
(e) none of the representations and warranties contained in the
Placing and Open Offer Agreement not being, or ceasing to be, true
and accurate or being or becoming misleading on the date of the
Placing and Open Offer Agreement or at any time down to and
including Admission (by reference to the facts and circumstances
then existing);
(f) IGas complying with its obligations under the Placing and
Open Offer Agreement to the extent the same fall to be performed or
satisfied prior to Admission;
(g) Admission taking place by 8.00 a.m. (London time) on 4 April
2017 (or such later time or date as IGas and the Joint Brokers may
agree being not later than 28 April 2017); and
(h) in the good faith opinion of any of the Joint Brokers, there
not having been any material adverse change (whether or not
foreseeable) in, or any development likely to involve a prospective
material adverse change in the condition (financial, operational,
legal or otherwise), or the assets, earnings, business affairs,
general affairs, trading position or business prospects of IGas and
its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business since the date of the Placing and Open
Offer Agreement.
If any of the conditions contained in the Placing and Open Offer
Agreement are not fulfilled or waived by the Joint Brokers in
accordance with the terms and conditions of the Placing and Open
Offer Agreement, by the respective time or date where specified (or
such later time and/or date as IGas and the Joint Brokers may
agree, being not later than 8.00 a.m. on 28 April 2017), the
Placing will not proceed and the Placee's rights and obligations
hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be
made by the Placee in respect thereof.
The Joint Brokers may, in accordance with the terms of the
Placing and Open Offer Agreement at their discretion and upon such
terms as they think fit, where permitted waive compliance by IGas
with the whole or any part of any of IGas' obligations in relation
to the conditions in the Placing and Open Offer Agreement save
that, inter alia, the condition in the Placing and Open Offer
Agreement relating to Admission taking place may not be waived. Any
such extension or waiver will not affect Placees' commitments as
set out in this announcement.
None of the Joint Brokers, IGas or any other person shall have
any liability to any Placee (or to any other person whether acting
on behalf of a Placee or otherwise) in respect of any decision they
may make as to whether or not to waive or to extend the time and /
or the date for the satisfaction of any condition to the Placing
nor for any decision they may make as to the satisfaction of any
condition or in respect of the Placing generally, and by
participating in the Placing each Placee agrees that any such
decision is within the absolute discretion of the Joint
Brokers.
Termination of the Placing and Open Offer Agreement
The Joint Brokers are entitled, in accordance with the terms of
the Placing and Open Offer Agreement at any time before Admission,
to terminate the Placing and Open Offer Agreement by giving notice
to IGas if, amongst other things:
(a) the Company fails to comply with any of its obligations
under the Placing and Open Offer Agreement; or
(b) it shall come to the notice of any of the Joint Brokers that
any statement contained in this announcement, or any other document
or announcement issued or published by or on behalf of IGas in
connection with the Fundraising (together the "Placing Documents"),
is or has become untrue, incorrect or misleading, or any matter has
arisen, which would, if the Placing were made at that time,
constitute a material omission from the Placing Documents, or any
of them, in each case in a manner which, in the good faith opinion
of any of the Joint Brokers, is material in the context of the
Placing or other part of the Fundraising; or
(c) in the good faith opinion of any of the Joint Brokers, there
has been a material adverse change in, or any development
reasonably likely to involve a prospective material adverse change
in the condition (financial, operational, legal or otherwise), or
the assets, earnings, business affairs, general affairs, trading
position or business prospects of IGas and its subsidiaries,
whether or not arising in the ordinary course of business since the
date of the Placing and Open Offer Agreement; or
(d) there has occurred (i) any material adverse change in the
financial markets in the United States, the United Kingdom, or in
any member or associate member of the European Union or in the
international financial markets, (ii) any outbreak or escalation of
hostilities or other calamity or crisis, (iii) any change or
development involving a prospective change in national or
international political, financial or economic conditions, or
currency exchange rates or controls, or (iv) trading in Existing
Ordinary Shares on AIM is cancelled, suspended or limited or (v)
there are actual or prospective changes or developments in the
United Kingdom affecting the Placing Shares or (vi) there are
certain other disruptions, limitations or suspensions in respect of
the operations of certain stock exchanges or (vii) a banking
moratorium is declared by certain authorities, in each case the
effect of which is such as to make it, in the good faith judgment
of any of the Joint Brokers, impracticable or inadvisable to market
any of the Fundraising Shares or which may prejudice the success of
the Placing or other part of the Fundraising or dealings in the
Ordinary Shares following Admission.
Upon such termination, the parties to the Placing and Open Offer
Agreement shall be released and discharged (except for any
liability arising before or in relation to such termination) from
their respective obligations under or pursuant to the Placing and
Open Offer Agreement subject to certain exceptions.
By participating in the Placing, Placees agree that the exercise
by any of the Joint Brokers of any right of termination or other
discretion under the Placing and Open Offer Agreement shall be
within the absolute discretion of such Joint Broker and that such
Joint Broker need not make any reference to Placees and that it
shall have no liability to Placees whatsoever in connection with
any such exercise or failure so to exercise.
No prospectus
No offering document, prospectus or admission document has been
or will be submitted to be approved by the FCA or submitted to the
London Stock Exchange in relation to the Placing and Placees'
commitments will be made solely on the basis of the information
contained in this announcement (including this Appendix), released
by IGas today, and subject to the further terms set forth in the
contract note to be provided to individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this announcement (including this Appendix) is
exclusively the responsibility of IGas and confirms that it has
neither received nor relied on any other information,
representation, warranty, or statement made by or on behalf of IGas
or the Joint Brokers or any other person and none of the Joint
Brokers or IGas nor any other person will be liable for any
Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement which the
Placees may have obtained or received. Each Placee acknowledges and
agrees that it has relied on its own investigation of the business,
financial or other position of IGas in accepting a participation in
the Placing. Nothing in this paragraph shall exclude the liability
of any person for fraudulent misrepresentation.
Registration and settlement
Settlement of transactions in the Placing Shares following
Admission of the Placing Shares will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"),
subject to certain exceptions. IGas reserves the right to require
settlement for and delivery of the Placing Shares (or a portion
thereof) to Placees in certificated form if, in the Joint Brokers'
opinion, delivery or settlement is not possible or practicable
within the CREST system or would not be consistent with the
regulatory requirements in the Placee's jurisdiction.
Each Placee will, following its oral commitment in respect of
its allocation of Placing Shares be sent a confirmation setting out
the number of Placing Shares that it has agreed to subscribe at the
Issue Price and detailing the settlement instructions.
Each Placee agrees that it will do all things necessary to
ensure that delivery and payment is completed in accordance with
the standing CREST or certificated settlement instructions that it
has in place with the relevant Joint Broker.
IGas will deliver the Placing Shares to a CREST account operated
by the relevant Joint Broker as agent for IGas and the relevant
Joint Broker will enter its delivery (DEL) instruction into the
CREST system. The input to CREST by a Placee of a matching or
acceptance instruction will then allow delivery of the relevant
Placing Shares to that Placee against payment.
It is expected that settlement will take place on 4 April 2017,
which is the day following the General Meeting, on a delivery
versus payment basis. If there is a change following the date
hereof to the expected settlement date the Joint Brokers will
inform Placees, provided that the settlement date shall not be
extended beyond 28 April 2017.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by the Joint Brokers.
Each Placee is deemed to agree that, if it does not comply with
these obligations, the relevant Joint Broker may sell any or all of
the Placing Shares allocated to that Placee on such Placee's behalf
and retain from the proceeds, for the Joint Brokers account and
benefit, an amount equal to the aggregate amount owed by the Placee
plus any interest due. The relevant Placee will, however, remain
liable for any shortfall below the aggregate amount owed by it and
may be required to bear any stamp duty or stamp duty reserve tax
(together with any interest or penalties) which may arise upon the
sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
is copied and delivered immediately to the relevant person within
that organisation. Insofar as Placing Shares are registered in a
Placee's name or that of its nominee or in the name of any person
for whom a Placee is contracting as agent or that of a nominee for
such person, such Placing Shares should, subject as provided below,
be so registered free from any liability to UK stamp duty or stamp
duty reserve tax. Placees will not be entitled to receive any fee
or commission in connection with the Placing.
Representations and warranties
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably acknowledges, confirms,
undertakes, represents, warrants and agrees (as the case may be)
with each of the Joint Brokers (in its capacity as placing agent of
the Company, in each case as a fundamental term of their agreement
to acquire Placing Shares), the following:
1. that it has read and understood this announcement, including
the Appendix, in its entirety;
2. that (i) no offering document, listing particulars,
prospectus or admission document has been or will be prepared in
connection with the Placing and (ii) it has not received a
prospectus, admission document or other offering document in
connection with the Placing or the Placing Shares;
3. that the Existing Ordinary Shares in the capital of IGas are
admitted to trading on AIM, and IGas is therefore required to
publish certain business and financial information in accordance
with the rules and practices of AIM (collectively, the "Exchange
Information"), which includes a description of the nature of IGas'
business and IGas' most recent balance sheet and profit and loss
account and that it is able to obtain or access (i) such Exchange
Information and (ii) such information or comparable information
concerning any other publicly traded company, in each case without
undue difficulty;
4. that none of the Joint Brokers nor IGas nor any of their
respective affiliates nor any person acting on behalf of any of
them has provided, and will not provide, it with any material
regarding the Placing Shares or IGas or any other person other than
this announcement; nor has it requested any of the Joint Brokers,
IGas, any of their respective affiliates or any person acting on
behalf of any of them to provide it with any such information;
5. that the Placing Shares have not been and will not be
registered under the securities legislation of the United States,
Australia, Canada, South Africa or Japan and, subject to certain
exceptions, may not be offered, sold, transferred, delivered or
distributed, directly or indirectly, in or into those
jurisdictions;
6. that (i) it is not within the United States; (ii) it is not
within Australia, Canada, South Africa, Japan or any other
jurisdiction in which it is unlawful to make or accept an offer to
acquire the Placing Shares; (iii) it is not acquiring the Placing
Shares for the account of any person who is located in the United
States, unless the instruction to acquire was received from a
person outside the United States and person giving such instruction
has confirmed that it has the authority to give such instruction,
and that either (a) it has investment discretion over such account
or (b) it is an investment Joint Broker or investment company and,
in the case of each of (a) and (b), that it is acquiring the
Placing Shares in an "offshore transaction" (within the meaning of
Regulation S under the Securities Act); and (iv) it is not
acquiring the Placing Shares with a view to the offer, sale,
resale, transfer, delivery or distribution, directly or indirectly,
of any such Placing Shares into the United States or any other
jurisdiction referred to in (ii) above;
7. that the content of this announcement is exclusively the
responsibility of IGas and that neither of the Joint Brokers nor
any person acting on their respective behalf has or shall have any
liability for any information, representation or statement
contained in this announcement or any information previously
published by or on behalf of IGas and will not be liable for any
Placee's decision to participate in the Placing based on any
information, representation or statement contained in this
announcement or otherwise. Each Placee further represents, warrants
and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to
subscribe for the Placing Shares is contained in this announcement
and any information previously published by IGas by notification to
a Regulatory Information Service, such information being all that
it deems necessary to make an investment decision in respect of the
Placing Shares and that it has neither received nor relied on any
other information given or representations, warranties or
statements made by any of the Joint Brokers or IGas and none of the
Joint Brokers nor IGas will be liable for any Placee's decision to
accept an invitation to participate in the Placing based on any
other information, representation, warranty or statement. Each
Placee further acknowledges and agrees that it has relied on its
own investigation of the business, financial or other position of
IGas in deciding to participate in the Placing;
8. that none of the Joint Brokers nor any person acting on their
respective behalf nor any of their respective affiliates has or
shall have any liability for any publicly available or filed
information, or any representation relating to IGas, provided that
nothing in this paragraph excludes the liability of any person for
fraudulent misrepresentation made by that person;
9. that neither it, nor the person specified by it for
registration as a holder of Placing Shares is, or is acting as
nominee or agent for, and that the Placing Shares will not be
allotted to, a person who is or may be liable to stamp duty or
stamp duty reserve tax under any of sections 67, 70, 93 and 96 of
the Finance Act 1986 (depositary receipts and clearance
services);
10. that it has complied with its obligations under the Criminal
Justice Act 1993, section 118 of the Financial Services and Markets
Act 2000 ("FSMA") and in connection with money laundering and
terrorist financing under the Proceeds of Crime Act 2002 (as
amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money
Laundering Regulations 2007 (the "Regulations") and the Money
Laundering Sourcebook of the FCA and, if making payment on behalf
of a third party, that satisfactory evidence has been obtained and
recorded by it to verify the identity of the third party as
required by the Regulations;
11. that it is acting as principal only in respect of the
Placing or, if it is acting for any other person (i) it is duly
authorised to do so, and (ii) it is and will remain liable to IGas
and/or the Joint Brokers for the performance of all its obligations
as a Placee in respect of the Placing (regardless of the fact that
it is acting for another person);
12. if a financial intermediary, as that term is used in Article
3(2) of EU Directive 2003/71/EC (the "Prospectus Directive")
(including any relevant implementing measure in any member state),
that the Placing Shares subscribed by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in a
member state of the European Economic Area other than to qualified
investors, or in circumstances in which the prior consent of the
Joint Brokers has been given to the proposed offer or resale;
13. that it has not offered or sold and, prior to the expiry of
a period of six months from Admission, will not offer or sell any
Placing Shares to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
FSMA;
14. that it has not offered or sold and will not offer or sell
any Placing Shares to persons in the European Economic Area prior
to Admission of the Placing Shares except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
any member state of the European Economic Area within the meaning
of the Prospectus Directive (including any relevant implementing
measure in any member state);
15. that it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within
the meaning of section 21 of FSMA) relating to the Placing Shares
in circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person;
16. that it has complied and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving, the United
Kingdom;
17. (A) that it is a person falling within Article 19(5) and /
or Article 49(2)(a) to (d) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 or is a person to whom
this announcement may otherwise be lawfully communicated; and
(B) that any offer of Placing Shares may only be directed at
persons to the extent in member states of the European Economic
Area who are "qualified investors" within the meaning of Article
2(1)(e) of the Prospectus Directive and represents and agrees that
it is such a qualified investor;
18. that it is entitled to purchase the Placing Shares under the
laws of all relevant jurisdictions which apply to it, and that its
subscription/purchase of the Placing Shares will be in compliance
with applicable laws and regulations in the jurisdiction of its
residence, the residence of the Company, or otherwise;
19. that it (and any person acting on its behalf) will make
payment for the Placing Shares allocated to it in accordance with
this announcement on the due time and date set out herein, failing
which the relevant Placing Shares may be placed with other
subscribers or sold as the Joint Brokers may in their discretion
determine and without liability to such Placee;
20. that neither of the Joint Brokers, nor any of their
respective affiliates, nor any person acting on any of their
behalf, is making any recommendations to it, advising it regarding
the suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be a client of any of the Joint
Brokers and that none of the Joint Brokers have duties or
responsibilities to it for providing the protections afforded to
their clients or customers or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing and Open Offer
Agreement nor for the exercise or performance of any of its rights
and obligations thereunder including any rights to waive or vary
any conditions or exercise any termination right;
21. that the person whom it specifies for registration as holder
of the Placing Shares will be (i) itself or (ii) its nominee, as
the case may be. Neither the Joint Brokers nor IGas will be
responsible for any liability to stamp duty or stamp duty reserve
tax resulting from a failure to observe this requirement. Each
Placee and any person acting on behalf of such Placee agrees to
participate in the Placing and it agrees to indemnify IGas and each
of the Joint Brokers in respect of the same on the basis that the
Placing Shares will be allotted to the CREST stock account of the
relevant Joint Broker who will hold them as nominee on behalf of
such Placee until settlement in accordance with its standing
settlement instructions;
22. that these terms and conditions and any agreements entered
into by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with
such agreements shall be governed by and construed in accordance
with the laws of England and Wales and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by IGas or the Joint Brokers in
any jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange;
23. that IGas, the Joint Brokers and their respective affiliates
will rely upon the truth and accuracy of the representations,
warranties and acknowledgements set forth herein and which are
irrevocable and it irrevocably authorises IGas and the Joint
Brokers to produce this announcement, pursuant to, in connection
with, or as may be required by any applicable law or regulation,
administrative or legal proceeding or official inquiry with respect
to the matters set forth herein;
24. that it will indemnify and hold IGas, all of the Joint
Brokers and their respective affiliates harmless from any and all
costs, claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Placing;
25. that it will acquire any Placing Shares subscribed by it for
its account or for one or more accounts as to each of which it
exercises sole investment discretion and it has full power to make
the acknowledgements, representations and agreements herein on
behalf of each such account;
26. that its commitment to subscribe for Placing Shares on the
terms set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the
terms of the Placing and that Placees will have no right to be
consulted or require that their consent be obtained with respect to
IGas' conduct of the Placing. The foregoing representations,
warranties and confirmations are given for the benefit of IGas as
well as the Joint Brokers. The agreement to settle a Placee's
subscription (and/or the subscription of a person for whom such
Placee is contracting as agent) free of stamp duty and stamp duty
reserve tax depends on the settlement relating only to the
subscription by it and/or such person direct from IGas for the
Placing Shares in question. Such agreement assumes, and is based on
a warranty from each Placee, that neither it, nor the person
specified by it for registration as holder, of Placing Shares is,
or is acting as nominee or agent for, and that the Placing Shares
will not be allotted to, a person who is or may be liable to stamp
duty or stamp duty reserve tax under any of sections 67, 70, 93 and
96 of the Finance Act 1986 (depositary receipts and clearance
services). If there are any such arrangements, or the settlement
relates to any other dealing in the Placing Shares, stamp duty or
stamp duty reserve tax may be payable. In that event the Placee
agrees that it shall be responsible for such stamp duty or stamp
duty reserve tax, and neither IGas nor the Joint Brokers shall be
responsible for such stamp duty or stamp duty reserve tax. If this
is the case, each Placee should seek its own advice and notify the
Joint Brokers accordingly;
27. that no action has been or will be taken by any of IGas, the
Joint Brokers or any person acting on behalf of IGas or the Joint
Brokers that would, or is intended to, permit a public offer of the
Placing Shares in any country or jurisdiction where any such action
for that purpose is required;
28. that in making any decision to subscribe for the Placing
Shares, it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of subscribing for or purchasing the Placing
Shares. It further confirms that it is experienced in investing in
securities of this nature in this sector and is aware that it may
be required to bear, and is able to bear, the economic risk of, and
is able to sustain a complete loss in connection with the Placing.
It further confirms that it relied on its own examination and due
diligence of IGas and its associates taken as a whole, and the
terms of the Placing, including the merits and risks involved;
29. that it has (a) made its own assessment and satisfied itself
concerning legal, regulatory, tax, business and financial
considerations in connection herewith to the extent it deems
necessary; (b) had access to review publicly available information
concerning the IGas group that it considers necessary or
appropriate and sufficient in making an investment decision; (c)
reviewed such information as it believes is necessary or
appropriate in connection with its subscription or purchase of the
Placing Shares; and (d) made its investment decision based upon its
own judgement, due diligence and analysis and not upon any view
expressed or information provided by or on behalf of the Joint
Brokers;
30. that it may not rely on any investigation that any of the
Joint Brokers or any person acting on its behalf may or may not
have conducted with respect to IGas, its group, or the Placing and
none of the Joint Brokers have made any representation to it,
express or implied, with respect to the merits of the Placing, the
subscription or purchase of the Placing Shares, or as to the
condition, financial or otherwise, of IGas, its group, or as to any
other matter relating thereto, and nothing herein shall be
construed as a recommendation to it to purchase the Placing Shares.
It acknowledges and agrees that no information has been prepared by
any of the Joint Brokers or IGas for the purposes of this
Placing;
31. accordingly it acknowledges and agrees that it will not hold
the Joint Brokers, any of their respective associates or any person
acting on any of their behalf responsible or liable for any
misstatements in or omission from any publicly available
information relating to IGas' group or information made available
(whether in written or oral form) in presentations or as part of
roadshow discussions with investors relating to IGas' group (the
"Information") and that neither of the Joint Brokers nor any person
acting on their respective behalf, makes any representation or
warranty, express or implied, as to the truth, accuracy or
completeness of such Information or accepts any responsibility for
any of such Information;
32. irrevocably appoints any director or employee of the Joint
Brokers as its agent for the purpose of executing and delivering to
IGas and / or the registrar any documents on its behalf necessary
to enable it to be registered as the holder of Ordinary Shares
comprising its participation in the Placing or to complete the sale
of such Ordinary Shares in the circumstances referred to in this
announcement;
33. that, if it is a pension fund or investment company, its
subscription for Placing Shares is in full compliance with all
applicable laws and regulation; and
34. that in connection with the Placing, either of the Joint
Brokers and any of their respective affiliates acting as an
investor for its own account may take up Placing Shares in IGas and
in that capacity may retain, purchase or sell for its own account
such Placing Shares in IGas and any securities of IGas or related
investments and may offer or sell such securities or other
investments otherwise than in connection with the Placing. The
Joint Brokers do not intend to disclose the extent of any such
investment or transactions otherwise than in accordance with any
legal or regulatory obligation to do so.
By participating in the Placing, each Placee (and any person
acting on the Placee's behalf) subscribing for Placing Shares
acknowledges that: (i) the Placing Shares are being offered and
sold only pursuant to Regulation S under the Securities Act in a
transaction not involving a public offering of securities in the
United States and the Placing Shares have not been and will not be
registered under the Securities Act; and (ii) the offer and sale of
the Placing Shares to it has been made outside of the United States
in an "offshore transaction" (as such term is defined in Regulation
S under the Securities Act) and it is outside of the United States
during any offer or sale of Placing Shares to it.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
United Kingdom by them or any other person on the subscription by
them of any Placing Shares or the agreement by them to subscribe
for any Placing Shares.
Each Placee and any person acting on behalf of each Placee
acknowledges and agrees that the Joint Brokers or any of their
respective affiliates may, at their absolute discretion, agree to
become a Placee in respect of some or all of the Placing
Shares.
When a Placee or person acting on behalf of the Placee is
dealing with either of the Joint Brokers, any money held in an
account with the relevant Joint Broker on behalf of the Placee
and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the rules and
regulations of the FCA made under FSMA. The Placee acknowledges
that the money will not be subject to the protections conferred by
the client money rules; as a consequence, this money will not be
segregated from the relevant Joint Broker's money in accordance
with the client money rules and will be used by the relevant Joint
Broker in the course of its own business; and the Placee will rank
only as a general creditor of the relevant Joint Broker.
All times and dates in this announcement may be subject to
amendment. The Joint Brokers shall notify the Placees and any
person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
DEFINITIONS
In this announcement:
"2010 PD Amending Directive" means Directive 2010/73/EU;
"Admission" the admission of the Kerogen Shares, the Ancillary
Subscription Shares, the Placing Shares, the Open Offer Shares (if
any) and the Bond Equity Exchange Shares to trading on AIM becoming
effective in accordance with Rule 6 of the AIM Rules for
Companies;
"AIM" means the AIM market operated by the London Stock
Exchange;
"AIM Rules" means the rules published by the London Stock
Exchange applicable to companies with a class of securities
admitted to trading on AIM;
"Amended Secured Bond Agreement" means the secured Bond
Agreement as amended by the secured bond amendment and restatement
agreement;
"Ancillary Subscribers" means those investors including certain
Directors who will subscribe directly with the Company for the
Ancillary Subscription Shares at the Issue Price pursuant to the
Ancillary Subscription;
"Ancillary Subscription" the subscription by certain directors
of the Company, certain of their spouses and certain third parties
for New Ordinary Shares outside of the Placing;
"Ancillary Subscription Letters" means the agreements by way of
letter between the Company and the Ancillary Subscribers in
relation to the Ancillary Subscription;
"Ancillary Subscription Shares" the New Ordinary Shares to be
issued in connection with the Ancillary Subscription;
"Board" or "Directors" means the directors of the Company;
"Bond Agreement" the bond agreement for the Secured Bonds
between the Company and the Bond Trustee as amended and restated by
an amendment and restatement agreement dated 24 September 2015;
"Bond Equity Exchange" the Voluntary Equity Exchange, the
Conditional Secured Debt for Equity Swap and the Unsecured Debt for
Equity Swap (all as defined in the section entitled 'Details of the
Bondholder Transactions' in this announcement);
"Bonds" means the 10% IGas Energy plc Senior Secured Callable
Bonds 2013/2018 ("Secured Bonds") and the IGas Energy plc Senior
Unsecured Callable Bonds 2013/2018 ("Unsecured Bonds");
"Bondholders" means the holders of the Bonds;
"Bondholder Meetings" means the meetings of the Secured
Bondholders and Unsecured Bondholders at which the Bondholder
Resolutions will be proposed, details of which will be contained in
the Bondholder Summons;
"Bondholder Resolutions" means the resolutions of the Secured
Bondholders and Unsecured Bondholders to be set out in the
Bondholder Summons;
"Bondholder Summons" the document dated on or around 17 March
2017 (to be posted on Stamdata), convening a meeting of the holders
of the Bonds and seeking approvals from the Bondholders for the
Bondholder Resolutions;
"Canaccord" means Canaccord Genuity Limited;
"CREST" means the relevant system, as defined in the
Uncertificated Securities Regulations 2001 (SI 2001/3755) (in
respect of which Euroclear UK & Ireland Limited is the
operator);
"Deferred Shares" means the deferred shares in the Company of
9.999 pence each following the Subdivision;
"Existing Ordinary Shares" the 303,305,534 ordinary shares of 10
pence each in the capital of the Company in issue on the date of
this announcement;
"FSMA" means the Financial Services and Markets Act 2000;
"FCA" means the Financial Conduct Authority;
"Fundraising" the Kerogen Subscription, the Ancillary
Subscription, the Placing, the Open Offer and the Bond Equity
Exchange, taken together;
"Fundraising Shares" together the New Ordinary Shares to be
issued in connection with: (a) the Kerogen Subscription; (b) the
Ancillary Subscription; (c) the Placing; (d) the Open Offer; and
(e) the Bond Equity Exchange;
"Group" means the Company and its subsidiary undertakings from
time to time and all of them and each of them as the context admits
and "Group Company" means any one of them;
"General Meeting" means the Shareholder meeting of the Company
at which inter alia the Resolutions will be proposed, notice of
which will be set out in the Circular;
"IGas" or the "Company" means IGas Energy plc and/or its
subsidiaries as appropriate;
"Investec" means Investec Bank plc;
"Issue Price" means 4.5 pence per New Ordinary Share (save for
certain New Ordinary Shares which may be issued to Kerogen Investor
at nominal value, as described in the Circular);
"Joint Brokers" means Investec and Canaccord, or either of them
as the context shall require;
"Kerogen Capital" means Kerogen Capital II Limited, the manager
of Kerogen Investor, and its associated companies which act as a
manager of other funds;
"Kerogen Investor" means Unconventional Energy Limited;
"Kerogen Shares" means the New Ordinary Shares to be issued to
the Kerogen Investor pursuant to the Kerogen Subscription subject
to, inter alia, the Kerogen Subscription becoming unconditional in
all respects and Admission of the Fundraising Shares;
"Kerogen Subscription" means the conditional subscription for
New Ordinary Shares by Kerogen pursuant to the Kerogen Subscription
Agreement';
"Kerogen Subscription Agreement" means the agreement dated 17
March 2017 between the Company and Kerogen Investor in relation to
the Kerogen Subscription;
"London Stock Exchange" means London Stock Exchange plc;
"New Ordinary Shares" means the ordinary shares of 0.0001 pence
each following the Subdivision;
"Open Offer" means the conditional offer made to Qualifying
Shareholders to subscribe for the Open Offer Shares at the Issue
Price on the terms and subject to the conditions set out in the
Shareholder Circular;
"Open Offer Shares" means up to 90,911,660 New Ordinary Shares
being made available to Qualifying Shareholders pursuant to the
Open Offer;
"Ordinary Shares" means ordinary shares in the capital of the
Company from time to time;
"Placees" means persons by whom or on whose behalf a commitment
to acquire Placing Shares has been given and "Placee" means any one
of them;
"Placing" means the conditional placing of the Placing Shares by
the Joint Brokers, on behalf of the Company to raise approximately
$20m (when aggregated with the Ancillary Subscription);
"Placing and Open Offer Agreement" means the placing and open
offer agreement dated the date of this announcement among the
Company and the Joint Brokers in respect of the Fundraising;
"Placing Shares" the New Ordinary Shares to be issued pursuant
to the Placing which are being conditionally placed by the Joint
Brokers subject to, inter alia, the Placing becoming unconditional
in all respects and Admission of the Fundraising Shares;
"Prospectus Directive" means Directive 2003/71/EC (and
amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State) and includes
any relevant implementing measure in each Relevant Member
State;
"Qualifying Shareholders" means holders of Existing Ordinary
Shares who are eligible to be offered Open Offer Shares under the
Open Offer on the terms to be set out in the Circular;
"Regulatory Information Service" means any of the regulatory
information services included within the list maintained on the
London Stock Exchange's website;
"Resolutions" means the resolutions of the Company to be set out
in the Circular to (i) sub--divide the Company's Existing Shares
into New Ordinary Shares and Deferred Shares pursuant to the
Subdivision; (ii) authorise the Directors generally to allot New
Ordinary Shares; and (iii) to disapply pre-emption rights in
relation to the issue of New Ordinary Shares;
"Securities Act" means the US Securities Act of 1933, as
amended;
"Secured Bondholders" means holders of the Secured Bonds;
"Secured Bonds* means the senior secured callable bonds issued
by the Company;
"Shareholders" means holders of Existing Shares or Ordinary
Shares from time to time (as the context requires), and
"Shareholder" means any one of them;
"Subdivision" means the proposed subdivision of the Company's
Existing Ordinary Shares into New Ordinary Shares and Deferred
Shares;
"United Kingdom" or "UK" means the United Kingdom of Great
Britain and Northern Ireland;
"United States" or "US" means the United States of America, its
territories and possessions, any state of the United States and the
District of Columbia; and
"Unsecured Bondholders" means holders of the Unsecured
Bonds].
Important Notice
This Announcement and the information contained in it is
restricted and is not for release, publication or distribution,
directly or indirectly, in whole or in part, in, into or from the
United States of America (including its territories and
possessions, any state of the United States of America and the
District of Columbia, collectively the "United States"), Australia,
Canada, Japan or South Africa or any other jurisdiction in which
the same would constitute a violation of the relevant laws or
regulations of that jurisdiction (each a "Restricted
Territory").
This Announcement is for information purposes only and does not
constitute, or form part of, any offer or invitation to sell or
issue, or the solicitation of an offer to buy, acquire or subscribe
for, shares or any other securities of the Company (or any other
entity) or the solicitation of any vote or approval in any
Restricted Territory or in any other jurisdiction in which the same
would constitute a violation of the relevant laws or regulations of
that jurisdiction or to any person to whom it is unlawful to make
such offer, invitation or solicitation. Any failure to comply with
these restrictions may constitute a violation of the securities
laws of such jurisdictions. Subject to certain exemptions, the
securities referred to herein may not be offered or sold in any
Restricted Territory or for the account or bene t of any national
resident or citizen of any Restricted Territory. The Company's
shares and any other securities referred to in this Announcement
have not been and will not be registered under the United States
Securities Act of 1933, as amended ("Securities Act") or with any
securities regulatory authority of any state or other jurisdiction
of the United States, and may not be offered, sold or transferred,
directly or indirectly, in the United States absent registration
under the Securities Act or an available exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in compliance with any applicable securities
laws of any state or jurisdiction of the United States. Any
offering of shares or any other securities of the Company to be
made in the United States will be made only to a limited investors
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and outside the
United States in "offshore transactions" as defined in, and in
reliance on, Regulation S under the Securities Act.
This Announcement has been issued by, and is the sole
responsibility, of the Company. No representation or warranty
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by
Investec Bank plc or Canaccord Genuity or by any of their
respective affiliates or agents as to or in relation to, the
accuracy or completeness of this Announcement or any other written
or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefore is
expressly disclaimed.
Investec Bank plc ("Investec"), which is authorised by the
Prudential Regulation Authority (the "PRA") and regulated in the
United Kingdom by the FCA and the PRA, is acting solely for the
Company and no-one else in connection with the Fundraising and
Bondholder Transaction and will not regard any other person as a
client in relation to the Fundraising and the Bondholder
Transactions will not be responsible to anyone other than the
Company for providing the protections afforded to its clients or
for providing advice in relation to the Fundraising or any other
matter referred to herein. Its responsibilities as the Company's
nominated adviser and joint broker under the AIM Rules for
Companies and the AIM Rules for Nominated Advisers are owed to the
London Stock Exchange and the Company and not to any other person
including, without limitation, in respect of any decision to
acquire New Ordinary Shares in reliance on any part of this
announcement. Investec has not authorised the contents of, or any
part of, this announcement and no liability whatsoever is accepted
by Investec nor does it make any representation or warranty,
express or implied, for the accuracy or completeness of any
information or opinion contained in this announcement or for the
omission of any information. Nothing in this document shall be
relied upon as a promise or representation in this respect, whether
as to the past or the future. Investec expressly disclaims all and
any responsibility or liability, whether arising in tort, contract
or otherwise which it might otherwise have in respect of this
announcement.
Canaccord Genuity Limited ("Canaccord"), which is authorised by
the FCA, is acting exclusively for the Company and no-one else in
connection with the Fundraising and the Bondholder Transactions and
will not regard any other person as a client in relation to the
Fundraising and the Bondholder Transactions and will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Fundraising or any other matter referred to herein.
Its responsibilities as joint broker to the Company are owed to the
London Stock Exchange and the Company and not to any other person
including, without limitation, in respect of any decision to
acquire New Ordinary Shares in reliance on any part of this
announcement. Canaccord has not authorised the contents of, or any
part of, this announcement and no liability whatsoever is accepted
by Canaccord nor does it make any representation or warranty,
express or implied, for the accuracy or completeness of any
information or opinion contained in this announcement or for the
omission of any information. Nothing in this document shall be
relied upon as a promise or representation in this respect, whether
as to the past or the future. Canaccord expressly disclaims all and
any responsibility or liability, whether arising in tort, contract
or otherwise which it might otherwise have in respect of this
announcement.
No public offering of shares is being made in the United
Kingdom, any Restricted Territory or elsewhere. The distribution of
this Announcement and the offering of the Company's shares in
certain jurisdictions may be restricted by law. No action has been
taken by the Company, Investec Bank plc or Canaccord Genuity that
would permit an offering of such shares or possession or
distribution of this Announcement or any other offering or
publicity material relating to such shares in any jurisdiction
where action for that purpose is required. Persons into whose
possession this Announcement comes are required by the Company,
Investec Bank plc and Canaccord Genuity to inform themselves about,
and to observe, such restrictions.
The information in this Announcement may not be forwarded or
distributed to any other person and may not be reproduced in any
manner whatsoever. Any forwarding, distribution, reproduction, or
disclosure of this information in whole or in part is unauthorised.
Failure to comply with this directive may result in a violation of
the Securities Act or the applicable laws of other
jurisdictions.
There are matters set out within this Announcement that are
forward-looking statements. Such statements are only predictions,
and actual events or results may differ materially. For a
discussion of important factors which could cause actual results to
differ from forward-looking statements, refer to the Company's
Annual Report and Accounts for the nine months to 31 December 2015.
The Company does not undertake any obligation to update publicly,
or revise, forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
legally required. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
Announcement. No statement in this Announcement is or is intended
to be a pro t forecast or pro t estimate or to imply that the
earnings of the Company for the current or future nancial periods
will necessarily match or exceed the historical or published
earnings of the Company. The price of shares and the income from
them may go down as well as up and investors may not get back the
full amount invested on disposal of the shares.
It is expected that any shares in the Company to be issued
pursuant to the Fundraising and Bondholder Transactions will not be
admitted to trading on any stock exchange other than to trading on
AIM, a market operated by the London Stock Exchange. This
Announcement is not an offering document, prospectus, prospectus
equivalent document or AIM admission document. It is expected that
no offering document, prospectus, prospectus equivalent document or
AIM admission document will be required in connection with the
Fundraising and Bondholder Transactions and no such document has
been or will be prepared or submitted to be approved by the
Financial Conduct Authority or submitted to the London Stock
Exchange in relation to the Fundraising and Bondholder
Transactions.
Neither the content of the Company's website nor any links on
the Company's website is incorporated in, or forms part of, this
Announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
PFTOKODPABKKNND
(END) Dow Jones Newswires
March 17, 2017 03:02 ET (07:02 GMT)
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