UMC Energy Corporation Proposed Cancellation of Listing on AIM (0161R)
March 04 2016 - 2:00AM
UK Regulatory
TIDMUEP
RNS Number : 0161R
UMC Energy Corporation
04 March 2016
UMC Energy Corporation
("UMC Energy" or the "Company")
Proposed cancellation of the admission of the Company's shares
to trading on AIM
UMC Energy announces that, following discussions with its major
shareholder, Natasa Mining Ltd ("Natasa"), the Company is intending
to put to shareholders proposals to cancel the admission of its
ordinary shares (the "Ordinary Shares") to trading on AIM
("De-listing").
The principal activity of the Company is investment directly and
indirectly in, and the operation of, resource exploration and
development projects. Presently the Company's main undertaking is
the development of the Papua New Guinea petroleum project (the
"Project"), in which the Group holds a 30 per cent. equity
interest, which is cost-carried to production. The remaining 70 per
cent. interest in the Project licences is held by CNOOC Limited
which is also the operator of the Project licences. As such, the
Company's interest is relatively passive with operating progress of
the Project under the control of CNOOC, albeit with the Company
playing an advisory role and having significant influence over
policy decisions.
The Company has for many years now been dependent on loan funds
being made available to it by its major shareholder, Natasa, to
meet its working capital and other requirements.
Over the past several years, the Company has undertaken
activities aimed at raising additional equity capital. For various
reasons, notably, the relatively early stage of the Project, these
endeavours have not proved successful. These endeavours have been
made more difficult by the decline in the oil price on commodity
markets over the period since about June 2014.
Recently, Natasa has advised the Company that while it is
prepared to continue to fund the personnel and general office costs
of the Company, it is not prepared to continue indefinitely to fund
the costs incurred by the Company by virtue of its shares being
admitted to trading on AIM. Accordingly, the Company has been
required specifically to consider whether retaining admission of
its shares to trading on AIM is in the best interests of
shareholders and if it is deemed to be so, how it will finance
these costs.
The Board believes, as a result of the general conditions within
the resources sector and the limited liquidity of the Company's
shares, that the costs associated with the Company's listing on the
AIM market exceed the benefits of maintaining such a listing and
can no longer be justified in light of the current challenging
environment and the tightly held nature of the Ordinary Shares.
Accordingly, the Directors believe the De-listing to be in the
best interests of the Company's shareholders as a whole. Particular
consideration has been given by the Board to the very low liquidity
in the Company's share.
Natasa holds 41.34 per cent. of the Company's issued shares and
has indicated that it intends to remain a shareholder in the
Company post the De-listing and intends to vote in favour of the
De-listing.
Following the De-listing, it is not intended that there will be
any market facility for dealing in the Ordinary Shares and no price
will be publicly quoted for the Ordinary Shares, nor will the
Company be required to announce material events or financial
results. In addition, it is intended that the Depositary Interest
and CREST facility will be cancelled, which will significantly
impact shareholders' ability to trade in the Company's shares. The
Company will endeavour to facilitate trading in the Ordinary Shares
among any remaining Shareholders in due course, but cannot make any
assurances that a purchaser will be available or as to the price
which may be agreed.
The Company is seeking to effect the De-listing in early April
2016 and, therefore, a circular to shareholders convening a general
meeting of the Company at which the De-listing will be proposed
will be despatched shortly.
Shareholders should be aware that, should the resolution not be
passed at the general meeting and the De-listing not come into
effect, it is likely that Natasa will demand repayment of its
outstanding loan. In such a scenario, the Company would be required
to undertake one of the of the following steps; negotiate with
Natasa to capitalise its loan, raise sufficient cash from
alternative sources to repay the loan, or place the Company into
administration. As at 29 February 2016, the loan outstanding to
Natasa was US$17.3 million.
- Ends -
Enquiries:
UMC Energy Corporation
Chrisilios Kyriakou, Chairman
+44(0) 20 3642 1633
Strand Hanson Limited
Angela Hallett / James Spinney
+44 (0) 20 7409 3494
This information is provided by RNS
The company news service from the London Stock Exchange
END
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