14th Oct 2015 09:47
LONDON (Alliance News) - Independent Oil and Gas PLC on Wednesday said it has cleared its outstanding debt owed to Darwin Capital Ltd after issuing shares through a debt conversion notice, but said it only has enough funding to last until late November as it scrambles to source new funding.
"It is important for Independent Oil and Gas and all its stakeholders that the outstanding liability to Darwin has been extinguished. We are grateful that Darwin has allowed their loan to be restructured and extended several times without levying additional interest and fees," said Chief Executive Mark Routh.
The company said Darwin sold 2.1 million shares last Thursday, which represented all of the remaining Independent shares held by Darwin pursuant to the financing agreement back in June 2014.
The sale of those shares reduced Independent's debt owed to Darwin to GBP245,781 from GBP322,580.
That was followed by Darwin submitting a debt conversion notice on Tuesday, confirming Darwin had elected to convert the remaining GBP245,781 of debt into 6.5 million shares at a price of 3.777 pence per share.
That 3.777p price is a discount to Independent's opening share price on Wednesday before the announcement of 4.625p. Following the news, Independent Oil shares were up 22% to 5.64p.
Following the share issuance, Independent has cleared its outstanding debt with Darwin and the company said it has funding until "late November", with an update expected in due course.
Previously, Independent Oil said it would run out of cash before the end of October, but managed to get GBP15,960 in working capital from Darwin's sale of the 2.1 million shares last Thursday.
In the first half of 2015, the company agreed to acquire the 50% stake in the Skipper licence in the UK North Sea that it did not own so it could wholly-own the project. It plans to purchase the stake from Alpha Petroleum Resources Ltd and Independent has until December 7 to complete the deal.
Attention will now turn to Independent Oil's financing situation as it struggles to source money for working capital purposes, let alone to develop the Skipper licence.
By Joshua Warner; [email protected]; @JoshAlliance
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