Sound Oil PLC Nervesa Reserve Based Lending - Signature (8959W)
November 13 2014 - 2:00AM
UK Regulatory
TIDMSOU
RNS Number : 8959W
Sound Oil PLC
13 November 2014
13 November 2014
Sound Oil plc
("Sound Oil" or the "Company")
Nervesa Reserve Based Lending - Signature
Sound Oil, the European / Mediterranean focused upstream oil and
gas company, is pleased to announce signature of the Reserve Based
Lending facility for the Nervesa discovery which was previously
announced on 23 September 2014.
The Company is pleased to confirm signature of a Euro 7 million,
24 month bullet loan issued at par with a 5% coupon (the "Loan").
The Loan is provided by Greenberry S.A. ("Greenberry"), an
affiliate of Continental Investment Partners S.A. ("Continental"),
Sound Oil's cornerstone investor. The Loan is secured upon the
Carita permit (which holds the Nervesa discovery) and after award
of the first Nervesa production concession, expected during 2015,
will be without recourse to the Company (see note 1 below for
further terms of the Loan). In addition the Company has
conservatively decided to ringfence 50% of the free cash flows from
Rapagano and Nervesa for the 24 month period of the Loan. This cash
pool will then be applied towards the settlement of the Loan.
Related Party Transaction
Greenberry is an affiliate of Continental. Continental is
currently directly and indirectly interested in 15.48% of the
Company's issued share capital and Marco Fumagalli, a director of
the Company, is Managing Partner of, and a 25% shareholder in,
Continental. Under the AIM Rules for Companies (the "AIM Rules")
therefore, Continental is deemed to be a related party of the
Company and the Loan is a related party transaction pursuant to
Rule 13 of the AIM Rules.
The independent directors of Sound Oil consider, having
consulted with the Company's nominated adviser, that the terms of
the Loan are fair and reasonable insofar as the shareholders of
Sound Oil are concerned.
James Parsons, Sound Oil's Chief Executive Officer,
commented:
"This loan is the second major investment by our cornerstone
institutional investor, funding the Company and demonstrating the
value of our flagship asset, Nervesa.
The Company is approaching an exciting period of back-to-back
drilling, which commences with site operations at Nervesa in
December."
Note 1: As part of the Loan, Greenberry is being granted a 4%
royalty on gross revenues from the Nervesa discovery within the
Carita permit area and an introduction and commitment fee.
Greenberry has agreed for the introduction fee to be paid in Sound
Oil shares at an effective issue price of 16 pence per ordinary
share. The effective issue price represents a 50.2% premium to the
closing mid-market price per Sound Oil share on Tuesday 11 November
2014 and will result in the issue of 3,906,250 ordinary shares in
the Company. A commitment fee of Euro 612,500 is payable in
cash.
For further information please contact:
Sound Oil j.parsons@soundoil.co.uk
James Parsons, Chief Executive
Officer
Smith & Williamson - Nominated Tel: +44 (0)20 7131 4000
Adviser
Azhic Basirov
David Jones
Ben Jeynes
Peel Hunt - Broker Tel: +44 (0)20 7418 8900
Richard Crichton
Charles Batten
This information is provided by RNS
The company news service from the London Stock Exchange
END
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