15th Jun 2016 08:22
LONDON (Alliance News) - Natural resources investor Highlands Natural Resources PLC on Wednesday said it has struck a deal to sell its helium assets to AIM-listed Opera Investments PLC, as Highlands posted a loss for the financial year that ended in March.
Highlands and Opera have reached a heads of terms agreement under which Opera will acquire Highlands Helium Development Ltd, which owns the Helios Two helium and natural gas project in the US state of Montana.
Opera will acquire the assets for a total of GBP4.0 million. This will include Opera issuing shares to Highlands at 15.00 pence per share, plus an equity financing to raise not less than USD750,000 to fund future investment and working capital requirements for the assets. In addition, Opera will reimburse Highlands for all costs it has incurred on the project.
For Opera, which only has a GBP1.3 million market capitalisation, the deal will constitute a reverse takeover under AIM rules, meaning its shares have been suspended. They were last quoted at 7.50p.
"This transaction reflects Highlands' intention to generate value for shareholders from its exciting asset base in tandem with focussing on its DT Ultravert business that is looking to transform the global re-fracking business," said Highlands Chief Executive Robert Price.
"These heads of terms with Highlands move Opera one important step closer to acquiring a valuable development-ready asset. Given broad concerns around helium scarcity and price increases, the Opera management team views the Helios Two assets as a highly compelling development opportunity that fits well with its existing strategy and core competencies," said Paul Dudley, Opera's chairman.
The move came as Highlands said it made a pretax loss of GBP1.8 million for the period from its incorporation on November 13, 2014 to the end of March 2016. It made no revenue in the period.
Highlands shares were up 4.4% to 48.4 pence Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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