Range Resources Limited Proposed Debt Restructuring and Acquisition (1365T)
18 March 2019 - 6:00PM
UK Regulatory
TIDMRRL
RNS Number : 1365T
Range Resources Limited
18 March 2019
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER
THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE
("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
PROPOSED DEBT RESTRUCTURING AND ACQUISITION
Range, an international company with oil and gas projects and
oilfield service businesses in Trinidad and Indonesia, is pleased
to announce a comprehensive restructuring of the various payment
obligations with LandOcean Energy Services Co., Ltd. ("LandOcean")
(the "Proposed Debt Restructuring").
Key Highlights:
-- Medium term extension agreed to repayment obligations with no payments of principal or interest due until 2022 at
the earliest;
-- US$20 million convertible note extended for a new 3-year term with interest payments only due for repayment at
maturity in November 2022. Revised conversion price at a 267% premium to current share price;
-- Reduction in overall outstanding debt of over 20% by a repayment of US$19.7 million of the outstanding balance
through issuance of new shares;
-- Refundable deposit of US$2.8 million paid by Range to LandOcean in December 2017 will be utilised in permanent
payment towards the outstanding consideration for RRDSL acquisition. The remaining consideration will be
extended for a further 3-year period;
-- The completion of the Proposed Debt Restructuring is subject to approval by Range shareholders, approval by
LandOcean shareholders (if required) and the completion of a proposed new acquisition;
-- The Board has identified a transformational acquisition opportunity to acquire a 49% interest in a pre-school
education business operating in China, with due diligence process currently underway (the "Proposed
Acquisition");
-- The Proposed Acquisition, if completed, would constitute a reverse takeover under Rule 14 of the AIM Rules that
will be subject to a vote of the Company's shareholders and relevant regulatory approvals; and
-- The Company has requested a suspension of trading in its shares on AIM and ASX with immediate effect pending the
publication of an admission document.
Range's Chairman, Kerry Gu, commented:
"We are delighted to have successfully renegotiated our payment
obligations with LandOcean and to have secured extension of
repayments until 2022 at the earliest. This was our key objective
for 2019 and this is an important step for the Company in
stabilizing the balance sheet position and positing the business
towards growth. I would like to thank both LandOcean and my fellow
shareholders for their continued support during this process.
Moreover, we are particularly excited with a potentially
transformational acquisition opportunity and I look forward to
sharing further details with our shareholders in due course. We
will also be undertaking a review of the oil and gas business.
Upon completion of the Proposed Debt Restructuring and the
Proposed Acquisition, the Company will have a reduced debt burden,
improved working capital and liquidity position and an ability to
progress with new opportunities."
Proposed Debt Restructuring
As noted in the half-yearly report and accounts released today,
the total balance due to LandOcean at 31 December 2018 was
approximately US$89 million and comprises the following four main
elements:
-- Convertible Note of US$20.0 million ("Convertible Note");
-- Purchase orders related to the Integrated Master Services Agreement of US$39.8 million (plus accrued interest of
US$3.4 million) ("IMSA payments");
-- RRDSL acquisition net consideration of US$0.4 million (plus accrued interest of US$0.1 million) ("RRDSL
Consideration"); and
-- RRDSL loan balance with LandOcean group companies of US$15.6 million (plus accrued interest of US$9.5 million)
("RRDSL Loans").
The outcome of the Proposed Debt Restructuring for each element
is as follows:
Convertible Note
* New maturity date of 3 years after all conditions
precedent are satisfied
* Interest will now be paid at maturity (including the
interest accrued under existing note for 2019)
* Conversion price of 0.11p per note
IMSA Payments
* Term for repayment extended to April 2023
* Interest rate unchanged at 6% pa (interest payable at
final payment date)
-------------------------------------------------------------
RRDSL Consideration
* US$2.8 million refundable deposit will be allocated
permanently towards the Consideration and will not be
refunded to Range
* Remaining net consideration due of US$0.4million will
be extended by a further 3 years to November 2023
* Interest will continue to accrue on the unpaid
consideration at rate of 6% pa (payable at same time
as the consideration)
-------------------------------------------------------------
RRDSL Loans
* US$19.7 million of the outstanding amount is to be
repaid through the issue of new shares in the Company
* The Shares will be issued at the volume weighted
average price (VWAP) on the Australian Stock Exchange
for the 90-day trading period prior to the date of
issue
* Repayment of the remaining amount of the RRDSL Loans
will be extended for a further 3-year period to
November 2023 with annual interest of 6% payable upon
final repayment date
-------------------------------------------------------------
The Proposed Debt Restructuring is subject to satisfaction (or
waiver) of the following conditions:
1. Shareholder approval of the proposed issuance of shares to
LandOcean (and any other required shareholder approvals to affect
the Proposed Debt Restructuring) at a General Meeting of the
Company (expected to be held in Q3 2019);
2. Approval by LandOcean shareholders (if required); and
3. Completion of the Proposed Acquisition which is expected to
require approval by the Company's shareholders.
Further details will be provided in the Notice of Meeting of the
Company and an Independent Expert's Report which will accompany the
Notice of Meeting. The long-stop date detailed in the Proposed Debt
Restructuring agreements for all conditions to be satisfied is 31
December 2019 and LandOcean has agreed that Range has no obligation
to make any payments of principal or interest during that time.
Proposed Acquisition
The Proposed Debt Restructuring is conditional on the Company
completing an identified acquisition on or before the end of 2019.
The Board has identified what it considers to be a transformational
acquisition opportunity to acquire a 49% interest in a pre-school
education business operating in China. A detailed legal, financial
and commercial due diligence process is currently underway. Range
expects that the due diligence process will be completed during
April 2019 and full details will be provided to shareholders upon
the signing of any binding agreements.
The Proposed Acquisition, if completed, would constitute a
reverse takeover under Rule 14 of the AIM Rules. Admission to
trading on AIM of the Company as enlarged by the Proposed
Acquisition would require publication of an Admission Document and
would be subject to a vote of the Company's shareholders.
The Company has requested a suspension of trading in its shares
on AIM and ASX with immediate effect pending the publication of an
admission document or confirmation by the Company that the Proposed
Acquisition is not to proceed. There can be no guarantee that the
Proposed Debt Restructuring or the Proposed Acquisition will
complete. Further announcements will be made as and when
appropriate.
Related Party Transaction
LandOcean is a related party of the Company for the purposes of
the AIM Rules by virtue of its status as a substantial shareholder
holding 17% of the existing Ordinary Shares. The Directors
consider, having consulted with the Company's nominated adviser,
Cantor Fitzgerald Europe, that the terms of the Proposed Debt
Restructuring are fair and reasonable insofar as the Company's
shareholders are concerned.
Contact details
Cantor Fitzgerald Europe (Nominated
Range Resources Limited Adviser and Broker)
Evgenia Bezruchko (Group Corporate David Porter / Nick Tulloch (Corporate
Development Manager) Finance)
e. admin@rangeresources.co.uk t. +44 (0)20 7894 7000
t. +44 (0)20 3865 8430
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END
MSCCKFDQABKKCND
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