TIDMTOM
RNS Number : 8450X
TomCo Energy PLC
01 September 2022
1 September 2022
TOMCO ENERGY PLC
("TomCo" or the "Company")
Convertible Loan Note Facility and Proposed Issue of Associated
Warrants
and Further Extension of Valkor Loan
TomCo Energy plc (AIM: TOM), the US operating oil development
group focused on using innovative technology to unlock
unconventional hydrocarbon resources, is pleased to announce that
the Company has obtained an unsecured facility of up to GBP750,000
via a convertible loan note instrument and associated subscription
and put option agreement (together, the "Convertible Loan") entered
into with certain subscribers introduced by Novum Securities
Limited ("NSL"), the Company's broker, as further detailed
below.
The proceeds from the initial tranche of the Convertible Loan
will be utilised to repay a principal amount of US$250,000 of the
unsecured US$1.5 million loan from Valkor Oil & Gas LLC
("Valkor") advanced to the Company's wholly owned subsidiary,
Greenfield Energy LLC ("Greenfield"), as announced on 16 November
2021 and for general corporate purposes. The Convertible Loan is
intended to bridge the Company's financing requirements as the
Board seeks to further progress and finalise negotiations with a
potential financing party for a larger debt funding package to
enable the Company to execute on its development plans for
Greenfield and the Tar Sands Holdings II LLC ("TSHII") site. There
can be no certainty that such larger funding arrangements will
ultimately be successfully secured or as to the terms of any such
debt facility.
The Convertible Loan
The Convertible Loan facility comprises two equal tranches of
GBP375,000. The Company has already drawn down the initial tranche
of GBP375,000 and has at its sole election, an option to draw down
all of the remaining GBP375,000 on or before 30 September 2022. If
the option lapses, the second tranche may thereafter still be drawn
down by mutual consent of the parties. Interest equating to a fixed
amount of five per cent. of the principal amount drawn down shall
accrue until repayment, conversion or redemption of the notes.
Amounts drawn down under the facility and the associated accrued
interest are convertible at any time at the election of a
noteholder via service of a conversion notice. Alternatively, they
may be repaid in cash before 30 November 2022 at the election of
the Company by way of the Company giving five business days' notice
in writing during which period the noteholder(s) concerned remain
entitled to serve a conversion notice prior to such repayment.
If any amounts drawn down under the Convertible Loan are not
repaid or converted prior to the scheduled redemption date of 30
November 2022, the noteholder(s) concerned shall be deemed to have
served a conversion notice to convert the outstanding balance and
the associated accrued interest into new ordinary shares of no-par
value in the capital of the Company ("Ordinary Shares").
The conversion price per new Ordinary Share under the facility
shall be determined as the lower of: (i) 0.75 pence; and (ii) the
volume-weighted average price of an Ordinary Share during any five
of the fifteen business days prior to service or deemed service of
a conversion notice, as selected by the noteholder(s) concerned and
sourced from Bloomberg L.P., discounted by 15 %.
Warrants
In connection with the initial GBP375,000 already drawn down,
the Convertible Loan subscribers will be issued with 50 ,000 ,000
warrants, with each warrant affording the holder the right to
subscribe for one new Ordinary Share at an exercise price of 0.75
pence per share, for a period of two years from 31 August 2022 (the
"First Subscriber Warrants"). If such First Subscriber Warrants
were to subsequently be exercised in full, it would result in the
issue of 50,000,000 new Ordinary Shares raising a further
GBP375,000 towards the development of the Company's business.
If the second tranche of GBP375,000 of the Convertible Loan is
drawn down (the "Second Drawdown"), the Convertible Loan
subscribers will be issued with a further 50,000,000 warrants by
the Company, with each warrant affording the holder the right to
subscribe for one new Ordinary Share at an exercise price of 0.75
pence per share, for a period of two years from the date of such
Second Drawdown (the "Second Subscriber Warrants"). If such Second
Subscriber Warrants were to subsequently be exercised in full, it
would result in the issue of 50,000,000 new Ordinary Shares raising
a further GBP375,000 towards the development of the Company's
business.
NSL will also be issued 5,000,000 warrants, with each warrant
affording the right to subscribe for one new Ordinary Share at an
exercise price of 0.75 pence per share, for a period of two years
from 31 August 2022 (the "Broker Warrants"). If the Broker Warrants
were to subsequently be exercised in full, it would result in the
issue of 5,000,000 new Ordinary Shares raising a further GBP37,500
towards the development of the Company's business.
Further Extension of the Valkor Loan
On 16 November 2021, the Company announced details of an
unsecured US$1.5 million loan from Valkor to the Company's wholly
owned subsidiary, Greenfield (the "Valkor Loan"), which was used
for the acquisition of the initial 10% of the Membership Interests
in TSHII.
On 31 May 2022, 28 June 2022 and 1 August 2022, the Company
announced that the terms of the Valkor Loan had been varied in
order to extend the repayment date, with the last extension being
to on or before 31 August 2022. The Company announces that the
terms of the Valkor Loan have now been further varied to extend the
repayment date for the remaining US$1,250,000 principal amount of
the loan, following the envisaged repayment of US$250,000 detailed
above, to on or before 14 October 2022.
As a former joint venture partner, Valkor is considered to be a
related party of the Company (as defined in the AIM Rules for
Companies) and, accordingly, the further variation of the Valkor
Loan's terms is deemed to constitute a related party transaction
pursuant to AIM Rule 13. The TomCo directors, having consulted with
Strand Hanson Limited, the Company's Nominated Adviser, consider
that the further variation of the Valkor Loan's terms is fair and
reasonable insofar as the Company's shareholders are concerned.
Commenting John Potter, CEO of TomCo, said : "This Convertible
Loan provides the Company with bridge financing whilst we seek to
further progress and finalise negotiations with a potential
financing partner for a larger debt funding package that, if
secured, would enable the Company to execute on its development
plans for Greenfield and the TSHII site. Whilst there can be no
certainty that a suitable funding package will ultimately be
secured, these are very exciting times for TomCo and I look forward
to making further announcements in due course."
Enquiries :
TomCo Energy plc
Malcolm Groat (Chairman) / John Potter (CEO) +44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Matthew Chandler +44 (0)20 7409 3494
Novum Securities Limited (Broker)
Jon Belliss / Colin Rowbury +44 (0)20 7399 9402
IFC Advisory Limited (Financial PR)
Tim Metcalfe / Florence Chandler +44 (0)20 3934 6630
For further information, please visit www.tomcoenergy.com .
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
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