TIDMCOV
RNS Number : 5825L
Cove Energy PLC
05 September 2012
5 September 2012
FOR IMMEDIATE RELEASE
Cove Energy plc
Funding arrangements with PTTEP Africa Investment Limited
On 17 August 2012, PTTEP Africa Investment Limited ("PTTEP AI")
declared wholly unconditional its offer dated 1 June 2012 for the
entire issued and to be issued share capital of Cove Energy plc
(("the Company" or "Cove", AIM: COV), the AIM-quoted upstream oil
and gas company, and Cove applied to the London Stock Exchange for
the cancellation of trading in Cove shares on AIM. The cancellation
of trading in Cove shares on AIM is expected to take effect on 18
September 2012. PTTEP AI announced on 23 August 2012 the exercise
of its right to acquire compulsorily the Cove shares that had not
already been assented to its offer.
PTTEP AI and Cove have today agreed the terms on which monies
may be provided by PTTEP AI to Cove from time to time in order to
provide Cove with the funding it requires in order to meet its
existing and ongoing working capital and other financial
obligations and for its general corporate purposes (the "Funding
Arrangements"). PTTEP AI is not obliged under the Funding
Arrangements to provide Cove with funding. The principal amount of
monies outstanding from time to time under the Funding Arrangements
is referred to herein as the "Loan Amount".
Interest periods under the Funding Arrangements will be one,
two, three or six months or such other periods as Cove and PTTEP AI
may from time to time agree ("Interest Period"). The rate of
interest for each Interest Period shall be LIBOR for an amount
denominated in US Dollars for such period plus 1.85%. Interest will
be calculated on the basis of the actual number of days elapsed and
a year of 360 days and, unless otherwise agreed, interest will be
payable on the last day of each Interest Period.
Cove will repay the whole or any part of the Loan Amount,
together with accrued interest and all other amounts outstanding,
within 5 Business Days of demand by PTTEP AI. Cove may prepay the
Loan Amount in whole or part at any time on giving 5 Business Days'
notice. No amount prepaid may be re-borrowed. PTTEP AI may require
repayment of the whole or any part of the Loan Amount, together
with accrued interest and all other amounts outstanding ,
immediately upon notice given by PTTEP AI to Cove if:
(a) Cove fails to perform any of its obligations under the
Funding Arrangements; or
(b) Cove is insolvent or unable to pay its debts as they fall
due, or the value of its assets is less than the amount of its
liabilities (taking into account contingent and prospective
liabilities); or
(c) any step is taken by Cove with a view to a composition with
creditors, or a moratorium or suspension of payments in relation to
any of its debts; or
(d) any step is taken with a view to the winding-up or
reorganisation of, or the appointment of an administrator, receiver
or administrative receiver in relation to Cove or any of its
assets, or the holder of any security over any asset of Cove takes
any step to enforce that security; or
(e) it becomes unlawful for PTTEP AI to perform any of its
obligations or to fund amounts outstanding under the Funding
Arrangements.
Interest will accrue on any amount unpaid under the Funding
Arrangements, from the due date up to the date of actual payment,
both before and after judgment. This interest will be computed by
reference to successive periods selected by PTTEP AI. The rate of
interest applicable during each of these periods will be a rate per
annum equal to 1% above the interest rate that would be applicable
(LIBOR plus 1.85%) if the unpaid amount constituted all or part of
the Loan. This interest shall be paid in arrears on the last day of
each of these periods and on the date of payment of the unpaid
amount. Unpaid default interest will be compounded.
The maximum Loan Amount under the Funding Arrangements is $215m
or as Cove and PTTEP AI otherwise agree from time to time.
If any amount to be provided under the Funding Arrangements,
when aggregated with the other borrowings of the Cove group, would
exceed the then-current cap on corporate borrowings in Cove's
articles of association, the directors of Cove have agreed to use
their best endeavours, as soon as reasonably practicable, to remove
the then-current cap on corporate borrowings. In these
circumstances, in the event that the articles of association of
Cove are not so amended within nine months thereof, the directors
of Cove will use their best endeavours to procure that the relevant
amount is instead capitalised by the issue of Cove ordinary shares.
In the event that neither of these events has taken place within
eighteen months thereof, PTTEP AI will be deemed to have made a
capital contribution to Cove equal to the pounds sterling
equivalent amount of the relevant amount.
Should Cove run out of available working capital to meet its
obligations, it may become insolvent or unable to pay its debts as
they fall due, or the value of its assets may become less than the
amount of its liabilities (taking into account contingent and
prospective liabilities).
The independent directors, John Craven and Michael Nolan (the
"Independent Directors"), have, in assessing the relative merits of
Cove entering into the Funding Arrangements, taken the following
into consideration:
(a) the likely availability of, and commercial terms relating
to, alternative third party finance;
(b) the commercial basis on which the Funding Arrangements are
being made available to Cove by PTTEP AI;
(c) the consequences of not having sufficient funding to meet
its obligations.
The Independent Directors consider, having consulted with Cenkos
Securities plc, the Company's Nominated Adviser, that the terms of
the Funding Arrangements are fair and reasonable insofar as Cove's
shareholders are concerned.
For further information please contact:
Cove Energy plc
John Craven, CEO Tel: +44(0)20 7831 3113
c/o Billy Clegg
Cenkos Securities
Jon Fitzpatrick Tel: +44 (0)20 7397 8900
Ken Fleming Tel: +44 (0)131 220 9772
FTI Consulting Tel: +44 (0)20 7831 3113
Billy Clegg
Edward Westropp
A copy of this announcement will be available at
www.cove-energy.com. The content of the website referred to in this
announcement is not incorporated into and does not form part of
this announcement.
Cenkos Securities plc, which is authorised and regulated in the
United Kingdom by the Financial Services Authority under FSA number
416932, is acting exclusively as Nominated Adviser and Broker to
the Company and is not acting for or advising any other person and
accordingly will not be responsible to any person other than the
Company for providing advice in relation to the contents of this
announcement. Neither Cenkos Securities plc nor any of its
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a
customer of Cenkos Securities plc in connection with this
announcement, any statement contained herein or otherwise.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities whether pursuant to this
announcement or otherwise. The distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe, such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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