TIDMZEN
RNS Number : 0436S
Zenith Energy Ltd
20 June 2018
June 20, 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA,
JAPAN, SOUTH AFRICA, REPUBLIC OF IRELAND, SWITZERLAND OR ANY OTHER
JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS
ANNOUNCEMENT
This announcement is not an offer of securities for sale, or an
offer or solicitation to buy or subscribe for, directly or
indirectly, securities to any person in the United States or any
other jurisdiction, including in or into Canada, Japan, South
Africa, Republic of Ireland, Switzerland and Australia or any other
jurisdiction in which such offer or solicitation is unlawful
("Excluded Territory"). This announcement is an advertisement and
not a prospectus. Investors should not purchase or subscribe for
any transferable securities referred to in this announcement except
on the basis of information contained in the prospectus in its
final form published by Zenith Energy Ltd. in connection with a
placing of, subscription for and offer of new common shares and the
proposed admission of those new shares to the Standard Listing
segment of the Official List of the UK Listing Authority and to
trading on the London Stock Exchange plc's main market for listed
securities. The issuance of such new common shares has received
conditional approval from the TSXV. A copy of the Prospectus will
be available shortly on the Company's website (www.zenithenergy.ca)
and will be available shortly for viewing at the National Storage
Mechanism at www.morningstar.co.uk/uk/nsm. Neither this
announcement nor any part of it shall form the basis of or be
relied on in connection with or act as an inducement to enter into
any contract or commitment whatsoever.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market
soundings (as defined in MAR) were taken in respect of the
fundraising described in this announcement with the result that
certain persons became aware of inside information (as defined in
MAR), as permitted by MAR. This inside information is set out in
this announcement. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
such inside information relating to the Company and its
securities.
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Publication of Prospectus
Placing and Subscription to raise GBP2.02 million
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE), the international oil and gas production company
operating the largest onshore oilfield in Azerbaijan, has today
published a prospectus (the "Prospectus") in connection with a
placing and subscription to raise GBP2.02 million (before expenses)
through the issue of 50,500,000 new common shares of no par value
in the capital of the Company ("Common Shares") at an issue price
of 4p per share (the "Issue Price") (the " Placing and
Subscription").
The Issue Price is a discount of 21.6 per cent. to the closing
middle market price of 5.10 pence per existing Common Share on the
LSE on 19 June 2018, being the last business day prior to this
announcement.
The Prospectus, which includes full details on the Group and the
terms and conditions of the Placing and Subscription, has been
approved by the UK Listing Authority. A copy of the Prospectus will
be available shortly from the Company's website
(www.zenithenergy.ca) and a copy has been submitted to the National
Storage Mechanism and will shortly be available for inspection at:
www.morningstar.co.uk/uk/nsm.
http://www.rns-pdf.londonstockexchange.com/rns/0436S_1-2018-6-20.pdf
Capitalised terms used in this announcement shall have the
meanings set out in the Prospectus.
The Company highly values its retail investor base and is
pleased to provide its private investors alongside institutional
investors with the opportunity to participate in the Subscription
by applying for Offer Shares through the PrimaryBid.com platform. A
further announcement will be made providing further details however
it is expected that PrimaryBid will launch an offer for
subscription to raise up to GBP800,000 via PrimaryBid (the
"PrimaryBid Offer") and that the PrimaryBid Offer will remain open
until, at the latest, 9.00 p.m. (London time) tonight.
Subscriptions will be considered by the Company on a "first come,
first served" basis and are subject to the conditions set out in
the Prospectus. PrimaryBid will not charge commission for this
service. The PrimaryBid Offer has not been underwritten.
The Company also announces that its shares have been placed in a
trading halt on the TSXV with immediate effect pending the release
of an announcement in relation to closing of the PrimaryBid
Offer.
Use of Proceeds from the Placing and Subscription
The Company's intention is to use the net proceeds from the
Placing and Subscription as follows (in order of priority):
Use Amount (GBP)
Deposit for the leasing of a new drilling rig GBP1.50
million
Working capital GBP0.21 million
Details of the Placing and Subscription and PrimaryBid Offer
Any net proceeds of the PrimaryBid Offer will be applied for
general working capital purposes.
The Placing comprises a total of 46,500,000 Placing Shares to be
issued by the Company at a Placing Price of 4 pence per new Common
Share, to raise gross proceeds of approximately GBP1,860,000
(before expenses). The estimated Net Proceeds of the Placing amount
to approximately GBP1,548,300. Each prospective investor has been
offered Placing Shares at the Placing Price and the Placing Shares
have been conditionally subscribed for by investors. Investors have
executed irrevocable placing letters undertaking to subscribe for
46,500,000 Common Shares in aggregate at the Placing Price. The
undertakings are conditional on Admission.
The Placing Shares will be issued credited as fully paid and
will, on Admission, rank pari passu in all respects with all other
Common Shares including the right to receive all dividends or other
distributions declared, made or paid after Admission. The Placing
Shares to be issued by the Company pursuant to the Placing will
represent approximately 22.10% of the Enlarged Common Shares in
Issue (excluding the Offer Shares).
The Subscription is for 4,000,000 Subscription Shares at the
Subscription Price of 4 pence per Common Share.
The Subscription Shares will be issued credited as fully paid
and will, on Admission, rank pari passu in all respects with all
other Common Shares including the right to receive all dividends or
other distributions declared, made or paid after Admission.
On Admission the Company will have a market capitalisation (at
the Placing Price) of approximately GBP8.42 million assuming
46,500,000 Placing Shares are issued at the Placing Price and
4,000,000 Subscription Shares are issued at the Subscription
Price.
The PrimaryBid Offer for up to 20,000,000 Offer Shares at the
Offer Price of 4 pence per Common Share will be open between 4.30
p.m. (London time) and 9.00 p.m. (London time) on 20 June 2018.
This will raise gross proceeds of up to GBP800,000. The PrimaryBid
Offer is not underwritten.
All Offer Shares will be issued, payable in full, at the Offer
Price. The Offer Shares will be issued credited as fully paid and
will, on Admission, rank pari passu in all respects with all other
Common Shares including the right to receive all dividends or other
distributions declared, made or
paid after Admission.
The Company expressly reserves the right to determine, at any
time prior to Admission, not to proceed with the Placing,
Subscription and/or the PrimaryBid Offer.
Following Admission, the net proceeds from the Placing and the
Subscription and the net proceeds of the PrimaryBid Offer will be
placed on deposit with the Company's bankers.
Investors should make their own investigations into the merits
of an investment in the Company. Nothing in this announcement
amounts to a recommendation to invest in the Company or amounts to
investment, taxation or legal advice.
It should be noted that a subscription for Offer Shares and
investment in the Company carries a number of risks. Investors
should consider the risk factors set out in the Prospectus before
making a decision to subscribe for Offer Shares. Investors should
take independent advice from a person experienced in advising on
investment in securities such as the Offer Shares if they are in
any doubt.
Andrea Cattaneo, Chief Executive Officer of Zenith,
commented:
"The proceeds of the fundraising will be used almost entirely
for our operational development, which remains our strategic focus
given the scale of our asset in Azerbaijan. We have sought to keep
the amount raised to the minimum necessary in order to mitigate the
effects of dilution and enable the Company to raise more capital to
support Zenith's growth at a later date with far more favourable
valuations of its stock on the back of the strong operational
results we are hoping to achieve. Our current share price presents
a highly attractive investment case on the basis of our existing
production, our 2P reserves of 31.7 million barrels of oil in
Azerbaijan, and the near-term completion of our operations in the
potentially prolific Zardab field."
For further information please contact:
Zenith Energy Ltd.
Andrea Cattaneo
Chief Executive Officer
E-mail: info@zenithenergy.ca
Tel: +1 (587) 315 9031
Vigo Communications - PR Adviser
Patrick d'Ancona
Chris McMahon
Kate Rogucheva
Tel: +44 (0) 20 7830 9700
Daniel Stewart & Company Plc - (Joint Broker)
Robert Emmet- Corporate Broking
Nikhil Varghese- Corporate Finance
Tel: + 44 (0) 207 776 6550
Optiva Securities - (Joint Broker)
Christian Dennis
Tel: + 44 (0) 203 137 1903
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Tel: + 44 (0) 203 328 5656
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this Document 20 June 2018
PrimaryBid Offer period 4.30 p.m. on 20 June
2018 to 9.00 p.m. on
20 June 2018
Admission and commencement of unconditional 8.00 a.m. on 26 June
dealings in the Placing Shares, Subscription 2018
Shares and Offer Shares
CREST members' accounts credited in respect 8.00 a.m. on 26 June
of Depository Interests 2018
Despatch of definitive share certificates 3 July 2018
for Shares no later than
These dates and times are indicative only, subject to change and
may be brought forward as well as moved back, in which case new
dates and times will be announced. All references to time in this
timetable are to London, UK time unless otherwise stated and each
of the times and dates are indicative only and may be subject to
change.
PLACING, SUBSCRIPTION AND PRIMARYBID OFFER STATISTICS
Number of Common Shares in issue as at the
date of this document 159,921,766
Number of Placing Shares 46,500,000
Number of Subscription Shares 4,000,000
Number of Offer Shares up to 20,000,000
Total number of Common Shares in issue on
Admission (excluding any Offer Shares) 210,421,766
Placing Price per Placing Share 4 pence
Subscription Price per Subscription Share 4 pence
Offer Price per Offer Share 4 pence
Market capitalisation at the Placing Price GBP8.42 million
Number of Options outstanding at 19 June
2018 11,600,000
Number of Warrants outstanding at 19 June
2018 17,804,706
Number of Common Shares that may result from
conversion of Convertible Loan Notes as at
19 June 2018 903,228
Fully diluted Share Capital on Admission
(excluding any Offer Shares) 240,729,700
Gross Proceeds of the Placing and Subscription GBP2.02 million
receivable by the Company
Estimated Net Proceeds of the Placing and GBP1.71 million
Subscription receivable by the Company
Estimated transaction costs GBP0.31 million
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the
"Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares and Subscription Shares have been subject to a product
approval process, which has determined that the Placing Shares and
Subscription Shares are: (i) compatible with an end target market
of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
investors should note that: the price of the Placing Shares and the
Subscription Shares may decline and investors could lose all or
part of their investment; Placing Shares and Subscription Shares
offer no guaranteed income and no capital protection; and an
investment in Placing Shares and Subscription Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing and the Subscription. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, only investors who
have met the criteria of professional clients and eligible
counterparties have been procured. For the avoidance of doubt, the
Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b)
a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect
to Placing Shares and the Subscription Shares.
Cautionary statements
This announcement has been issued by and is the sole
responsibility of Zenith. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. No reliance may or should be placed by any
person for any purpose whatsoever on the information contained in
this announcement or on its accuracy or completeness. The
information in this announcement is subject to change.
Copies of the Prospectus will be available from the Company's UK
offices, Thomas House, 84 Eccleston Square, London SW1V 1PX and on
Zenith's website at www.zenithenergy.ca. Neither the content of the
Company's website nor any website accessible by hyperlinks on the
Company's website is incorporated in, or forms part of, this
announcement.
The distribution of this announcement and the Prospectus into
jurisdictions other than the United Kingdom may be restricted by
law, and, therefore, persons into whose possession this
announcement and the Prospectus and/or any accompanying documents
comes should inform themselves about and observe any such
restrictions. Any failure to comply with any such restrictions may
constitute a violation of the securities laws of such jurisdiction.
In particular, subject to certain exceptions, this announcement and
the Prospectus should not be distributed, forwarded to or
transmitted in or into the United States or any other Excluded
Territory.
Recipients of this announcement and/or the Prospectus should
conduct their own investigation, evaluation and analysis of the
business described in this announcement and/or the Prospectus. This
announcement does not constitute a recommendation concerning an
investment in the common shares of Zenith. The contents of this
announcement are not to be construed as legal, business, financial
or tax advice. Each shareholder or prospective investor should
consult his, her or its own legal adviser, business adviser,
financial adviser or tax adviser for legal, financial, business or
tax advice.
This announcement includes "forward-looking statements". All
statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding
the Company's investment strategy, plans and objectives are
forward-looking statements. Forward-looking statements are subject
to risks and uncertainties and accordingly the Company's actual
future financial results and operational performance may differ
materially from the results and performance expressed in, or
implied by, the statements. These factors include but are not
limited to those described in the Prospectus. These forward-looking
statements speak only as at the date of this announcement. The
Company expressly disclaims any obligation or undertaking to update
or revise any forward-looking statements contained herein to
reflect actual results or any change in the assumptions, conditions
or circumstances on which any such statements are based unless
required to do so by applicable law, the Prospectus Rules, the
Listing Rules, the Market Abuse Regulation or the Disclosure
Guidance and Transparency Rules of the FCA.
Notes to Editors:
Zenith Energy Ltd. is an international oil and gas production
company, dual listed on the TSX Venture Exchange and London Stock
Exchange.
The Company operates the largest onshore oilfield in Azerbaijan
following the signing of a 25-year REDPSA, (Rehabilitation,
Exploration, Development and Production Sharing Agreement), with
SOCAR, State Oil Company of the Azerbaijan Republic, in 2016.
The Company's primary focus is the development of its Azerbaijan
operations by leveraging its technical expertise and financial
resources to maximise low-cost oil production via a systematic
field rehabilitation programme intended to achieve significantly
increased revenue. Zenith also operates, or has working interests
in, a number of natural gas production concessions in Italy. The
Company's Italian operations produce natural gas, natural gas
condensate and electricity.
Zenith's development strategy is to identify and rapidly seize
value-accretive hydrocarbon production opportunities in the onshore
oil & gas sector. The Company's Board of Directors and senior
management team have the experience and technical expertise to
develop the Company successfully.
To find out more, visit www.zenithenergy.ca or follow Zenith on
Twitter @zenithenergyltd
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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