Tower Resources PLC Extension of Loan Facility (0881R)
March 04 2021 - 2:00AM
UK Regulatory
TIDMTRP
RNS Number : 0881R
Tower Resources PLC
04 March 2021
4 March 2021
Tower Resources plc
("Tower" or the "Company")
Extension of Loan Facility
Tower Resources plc (TRP.L, TRP LN), the AIM listed oil and gas
company with its focus on Africa , is pleased to announce a further
extension of its Loan Facility ("Facility") of US$750,000. The
Facility is provided by the Company's shareholder Pegasus Petroleum
Limited ("Pegasus") whose ultimate beneficial owner is the
Company's Chairman and CEO, Jeremy Asher, and was originally
provided to the Company as a bridging loan announced on 16 April
2019. The Facility has now been extended to the end of November
2021, though the Company hopes to repay the Facility by 15 July
2021, in which case the cost of the extension will reflect the
earlier repayment.
The Facility was originally extended for 9 months, as announced
on 15 October 2019, in consideration of a 25% share of the
Company's future entitlements to royalties (if any) from production
on its Thali license in Cameroon, in addition to interest of 12%
per annum (pro rata) which was rolled up rather than paid in cash.
As announced on 28 August 2020, the Company received a further
6-month loan facility from Shard Merchant Capital ("Shard"), which
required fees, the prepayment of interest in the form of shares,
and the issue of a substantial number of warrants, and the Pegasus
Facility was extended for 6 months on similar terms including the
prepayment of interest accrued to the end of February 2021 in
shares. The purpose of these transactions was to provide an
appropriate return to Pegasus and subsequently to Shard to reward
the near-equity risk of the loans, in the event the Company
achieves success, while not creating any cash burden on the Company
until it would be in a position to repay the loans, which in the
case of the Shard loan was done in January 2021.
As previously announced, the $750,000 principal of the Pegasus
Facility remains outstanding and the Company's independent
Directors believe that it is in the Company's best interest not to
repay nor to convert the Facility now, nor to issue further
warrants, given the potential additional dilution this may
create.
Therefore, the Company has agreed with Pegasus to extend the
facility on terms equivalent to the 9-month extension agreed in
October 2019, in return for an increase in the 25% share of
royalties previously agreed in consideration for that October 2019
extension. Interest will accrue at 12% per annum pro rata, and will
be payable only at the end of the Facility period. Provided the
Facility is repaid prior to 15 July 2021, then the royalty share
will increase from 25% to 37.5%, and otherwise the royalty share
will increase to 50%.
The Extension constitutes a related party transaction in
accordance with AIM Rule 13. Accordingly, Paula Brancato and Mark
Enfield, being the Directors independent of the Extension,
consider, having consulted with the Company's Nominated Adviser, SP
Angel Corporate Finance LLP, that the terms of the Extension are
fair and reasonable insofar as the Company's shareholders are
concerned.
Jeremy Asher, Chairman and CEO, commented:
"The independent directors and I are all committed to getting
the NJOM-3 well in Cameroon drilled as soon as circumstances
permit. The possible easing of pandemic restrictions globally both
provides a more favourable market environment, and also means that
it is now important we complete current financing discussions for
the well. We are therefore optimistic that we can get this
financing in place by the summer, which would reduce the time
required for the extension of the facility, and this is why the
independent directors have adopted this extension structure. If the
NJOM-3 well succeeds as we hope, then we believe that the royalty
share agreed provides an appropriate reward to both shareholders
and Pegasus. We also hope that shareholders will see clearly, in
the terms of this extension, the confidence that I have in our
ability to deliver the NJOM-3 well and production from Thali in due
course."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Contacts
Tower Resources plc +44 20 7157 9625
Jeremy Asher
Chairman and CEO
Andrew Matharu
VP - Corporate Affairs
SP Angel Corporate Finance
LLP
Nominated Adviser and Joint
Broker
Stuart Gledhill
Caroline Rowe +44 20 3470 0470
ETX Capital
Joint Broker
Elliot Hance +44 20 7392 1436
Turner Pope Investments
(TPI) Limited
Joint Broker
Andy Thacker
Zoe Alexander +44 20 3657 0050
Panmure Gordon (UK) Limited
Joint Broker
Nick Lovering
Hugh Rich +44 20 7886 2500
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END
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