28th Jul 2015 10:03
LONDON (Alliance News) - Oilex Ltd Tuesday said it has written to shareholders ahead of a general meeting to be held in August urging them to vote in favour of the company's proposed fundraising to allow it to progress its work programme in India.
The India-focused company has already completed the issue of 45.0 million new shares in the company at AUD0.041 per share to "sophisticated investors" to raise a total of AUD1.8 million, which did not require shareholder approval.
Shareholders are voting on the company's larger capital raising announced earlier in July, which will comprise of a placing to raise another AUD21.2 million and a rights issue for a further AUD7.0 million to reach the ultimate AUD30 million target.
That second placing will consist of a further 287.3 million new shares at AUD0.041 per share and another 225.5 million new shares at AUD0.0418 per share to raise a combined AUD21.2 million, roughly USD16.3 million.
Under that second tranche, the 225.5 million new shares at AUD0.0418 will be issued to Zeta Resources Ltd. Zeta is paying the higher price in consideration of a deferred settlement date for those shares of up to five months from the general meeting where shareholders will vote on the second tranche.
On completion of the capital raising, if approved, Zeta will hold approximately 19.6% of the expanded shares in issue. Zeta is an active, resources focused holding and development company listed on the ASX, and is 85% owned by Utilico Investments Ltd.
The company also will separately undertaking a renounceable rights issue to all eligible shareholders to enable shareholders to have the opportunity to participate in the capital raising process at the same price as the first tranche at AUD0.041 per share.
That rights issue is fully underwritten and expected to raise a further total of AUD7.0 million, or USD5.3 million, via the issue of 169.5 million new shares on the basis of 1 new share at AUD0.041 for every 4 shares currently held by shareholders.
The total AUD30 million capital raising will be used for the company's work programme at the Cambay oilfield in India during 2015 and 2016. The 2015/16 work programme in India includes two horizontal multistage fracture stimulated production wells and five workovers of legacy wells.
On Tuesday, Oilex said it recommends all shareholders vote in favour of the proposals.
"The major part of the fundraising requires your voting support. The board believes that the resolutions to be proposed at the general meeting are in the best interests of the company and Shareholders as a whole. Accordingly, the directors unanimously recommend that all Shareholders vote in favour of the resolutions," said Oilex.
"By voting to support the fundraising process either by Proxy or in person at the general meeting on August 12, you will ensure that your company has the necessary funds available to undertake its growth plans and create sustainable value for all Shareholders and Stakeholders," it added.
Oilex said it was "important to understand" why the company is progressing with its proposals and said it was integral for the company to transform into a sustainable business from its Cambay project. Oilex said it reviewed "a range of different funding structures and opportunities" before it committed to its current plans.
The general meeting will be held on August 12.
Oilex shares were up 1.9% to 1.91 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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