TIDMXTR
RNS Number : 1921O
Xtract Resources plc
03 November 2016
For immediate release
03 November 2016
Xtract Resources Plc
Subscription and Equity Swap Agreements
The Board of Xtract Resources Plc ("Xtract" or the "Company") is
pleased to announce that it has today entered into a subscription
agreement with YA II EQ, Ltd. (the "Investor") for a subscription
for new ordinary shares in the Company for GBP980,000 in cash. In
addition, the Company has entered into an equity swap agreement
with the Investor for a payment by the Company of GBP870,000, which
will entitle the Company to twelve monthly settlement payments of
GBP72,500, subject to an agreed adjustment. The proceeds of the
subscription (net of expenses and the swap payment), together with
monthly proceeds pursuant to the equity swap agreement, will be
used by the Company for additional working capital.
Colin Bird, Executive Chairman, said: "As previously reported,
the Company had over previous months encountered challenges at
Chepica and Manica which required attention, and the same time
provided opportunities. The focus of the Company is now solely on
our project at Manica. We have entered into this new funding
arrangement to ensure the Company remains funded for its short and
mid-term progress. As the Company moves forward to ensure Manica's
value is fully released, shareholders will be kept updated and
fully informed on direction".
Subscription Agreement
The Investor has today agreed to subscribe for a total of
3,500,000,000 new Ordinary Shares ("Subscription Shares") in the
Company at a subscription price of 0.028p per Ordinary Share
("Subscription Price"), which amounts to GBP980,000 in aggregate,
before expenses (the "Subscription"). The Investor is an affiliate
of YA II PN, Ltd. (formerly known as YA Global Master SPV, Ltd.)
("YAPN"), with which, as referred to in the Company's announcement
on 24 October 2016, the Company has an existing Standby Equity
Distribution Agreement ("SEDA") and a Loan Note Facility ("Loan
Note Facility").
Completion of the Subscription is conditional on none of the
warranties given by the Company to the Investor in the Subscription
Agreement being or having become untrue or inaccurate at any time
prior to admission of the Subscription Shares to trading on AIM
("Admission") and Admission becoming effective by no later than
8.00 am on 8 November 2016 (or such later date as the Company and
the Investor may agree, in any event being no later than 8.00 am on
15 November 2016).
The Subscription Shares will on completion of the Subscription
be credited as fully paid and will rank pari passu in all respects
with the existing issued Ordinary Shares and will represent
approximately 19.14 per cent. of the enlarged issued share capital
of the Company.
On completion of the Subscription, the Company will initially
retain GBP110,000 of the Subscription proceeds (before expenses)
for general working capital purposes. The balance of GBP870,000 of
the Subscription proceeds will be used to make the payment to the
Investor under the Equity Swap Agreement as detailed below.
Equity Swap Agreement
The Company and the Investor have today entered into the equity
swap agreement (the "Equity Swap Agreement"). In return for the
payment by the Company to the Investor of GBP870,000 (the "Swap
Payment") as described above, the Investor has agreed to make
twelve monthly settlement payments to the Company of GBP72,500 at
the end of each month commencing with 30 November 2016 (the
"Monthly Base Settlement Amount"), subject to adjustment as
applicable as described further below. The Monthly Base Settlement
Amount is based on 291,666,667 Ordinary Shares (the "Applicable
Share Amount").
The adjustments, if any, to the Monthly Base Settlement Amount
are determined each month by calculating the difference between the
then prevailing market price (as defined in the Equity Swap
Agreement) of the Company's Ordinary Shares in the relevant month
and a benchmark price of 0.0308p per Ordinary Share (the "Benchmark
Price"). The market price for each month is calculated as the
average of the lowest ten (10) daily volume weighted average prices
of the Company's Ordinary Shares (the "Market Price") in that
month. The adjustment, if any, to the Monthly Base Settlement
Amount is then calculated as follows:-
(a) If the Market Price for that relevant month is greater than
the Benchmark Price, the Investor will pay to the Company the
Monthly Base Settlement Amount, plus an additional amount
determined in accordance with the following formula:-
Applicable Share Amount X (Market Price - Benchmark Price) x
50%
(b) If the Market Price for that Settlement Date is less than or
equal to the Benchmark Price, the Investor will pay to the Company
an amount equal to the Monthly Base Settlement Amount, less an
amount determined in accordance with the following formula:-
Applicable Share Amount x (Benchmark Price - Market Price)
and, to the extent that the amount determined in accordance with
the formula above exceeds the Monthly Base Settlement Amount (the
"Excess Amount"), then the Company will pay to the Investor an
amount equal to Excess Amount. This would only occur if the Market
Price was 0.0060p which is approximately 80 per cent. below the
closing mid-market price of 0.03p per Ordinary Share on 1 November
2016.
The monthly payments received by the Company in respect of the
Swap Payment will therefore be dependent on the future price
performance of the Ordinary Shares.
The Investor and the Company may mutually agree to terminate the
Equity Swap Agreement and accelerate the payments due under it in
certain circumstances. The Investor has agreed that it and its
affiliates will refrain from holding any net short position in
respect of the Company's Ordinary Shares.
Following Admission, the Investor will be interested in
3,500,000,000 Ordinary Shares in the Company, representing 19.14
per cent of the enlarged issued share capital and voting rights of
the Company.
While YAPN has currently no interest in the existing issued
share capital of the Company, as previously announced on 29
September 2016, YAPN was then interested in 12.68 per cent. of the
existing issued share capital. As YAPN has therefore been
interested in more than 10 per cent. of the issued share capital of
the Company within the last 12 months, and as YAPN is affiliated
with the Investor, the Subscription and Equity Swap Agreement is a
related party transaction pursuant to the AIM Rules. Accordingly,
the Directors of the Company consider, having consulted with the
Company's Nominated Adviser, that the terms of the Subscription and
Equity Swap Agreement are fair and reasonable insofar as
shareholders are concerned. In particular the Directors have taken
account of the Company's current financial position, as detailed in
the announcement published on 24 October 2016, and the current
requirement to raise additional funds to provide funds for working
capital and accrued creditors. In addition, the Directors have
noted that the Company is currently working to complete a Bank
Feasibility Study on the Company's Manica Project and that this is
expected to be completed this year and be a positive development
for the Company.
Subscription Shares
Application will be made by the Company for Admission in respect
of the Subscription Shares, with Admission expected to occur on or
around 8 November 2016.
On Admission, the Company will have 18,287,728,545, Ordinary
Shares in issue with voting rights. Xtract does not currently hold
any shares in treasury. Accordingly, this figure of 18,287,728,545
Ordinary Shares may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014 on market abuse.
Enquiries:
Xtract Resources Colin Bird, Executive +44 (0)20 3416
Plc Chairman 6471
Michael Cornish +44 (0)207628
Beaumont Cornish Felicity Geidt 3369
Email: corpfin@b-cornish.co.uk
+44 (0)207 382
Beaufort Securities Jon Belliss 8300
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGREAPFAEFNKFFF
(END) Dow Jones Newswires
November 03, 2016 03:00 ET (07:00 GMT)
Xtract Resources (LSE:XTR)
Historical Stock Chart
From Apr 2024 to May 2024
Xtract Resources (LSE:XTR)
Historical Stock Chart
From May 2023 to May 2024