21st Jan 2016 11:49
LONDON (Alliance News) - MX Oil PLC noted the sharp fall in its share price on Thursday, confirming it may conduct a placing at a price below the nominal value of its shares, meaning it would have to reorganise the company's issued share capital.
The company outlined plans last week to try to address concerns over its falling share price, but confirmed it is considering conducting a placing at a price of 0.5 to 1.0 pence per share - meaning the price could be lower than the nominal value of the shares of 1.0p.
MX Oil shares have fallen considerably since the start of 2016 when they were trading at 2.025p. Shares fell by over 51% between the start of this year and January 15, the last trading day before announcing it was considering all of its funding options moving forward.
Since that announcement last week, MX Oil shares have fallen a further 28%, and were trading down 12% at 0.616 pence per share on Thursday.
Overall, MX Oil shares have fallen a staggering 69% since the start of 2016.
MX Oil needs to source around USD2.0 million of funding, mainly to complete its investment in Nigeria in order to bring the underlying asset into production in the short term.
"The company is in the process of completing a conditional placing at a targeted price range of between 0.5p and 1.0p per new ordinary share. The book is the final stages of being built and it is expected to close shortly," said the company.
"In the event that a placing takes place at below the company's current nominal value of 1.0p per share, the company will be required to reorganise the company's share capital which will require shareholder consent," it added.
MX Oil said it will convene a general meeting shortly to get consent from shareholders "should they deem it to be in the best interests of shareholders to proceed with an equity fundraising on this basis".
However, although MX Oil wants to raise funds to progress its Nigerian asset, it also has received expressions of interest to acquire all or part of its Nigerian investment. MX Oil is considering selling the entire asset, or sourcing another company to invest alongside it to develop the asset.
"These options are all being actively discussed and the market will be updated accordingly," said MX Oil.
The Aje field in Nigeria is expected to be producing before the end of the first quarter of 2015.
By Joshua Warner; [email protected]; @JoshAlliance
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