3rd May 2016 08:18
LONDON (Alliance News) - Rose Petroleum PLC on Tuesday said it raised GBP800,000 to develop opportunities that have arisen in Cuba, specifically around the processing and manufacturing of gypsum and associated building materials.
The opportunity was introduced to Rose by Earth Source Investment Inc, which made "initial contacts" with the Cuban government, the company said.
The founders of Earth Source and other associated parties agreed to fund due diligence and transaction fees related to the opportunity, and also general working capital by subscribing for, in aggregate, 500.0 million new shares in Rose at 0.16 pence per share. Rose shares were up 22% at 0.195p Tuesday morning.
The new shares will equate to about 16% of the enlarged company. Subject to the conclusion of successful negotiations with the Cuban counterparty, concluding with a signed transaction agreement and subject to shareholder approval as necessary, Rose will grant Earth Source options over another 357.1 million new shares at an exercise price of 0.14p per share.
In addition, upon completion of a transaction, Rose intends to issue 65.7 million new shares at par value to Earth Source. That covers "services" provided to Rose in connection with the "introduction and reimbursement of expenses incurred in respect of identifying the Cuban opportunity".
Having announced a restructuring of its oil and gas portfolio to focus on the Paradox basin in the US state of Utah, Rose Petroleum said there could be significant near-term opportunities in the Cuban construction industry.
Earth Source will be able to nominate a non-executive director to the board, depending on whether a transaction in Cuba is successful.
There is no certainty of any transaction, Rose said, but it said it is in direct discussions with a company owned by the Cuban government about a potential deal. The state-owned company in question has extensive gypsum resources and reserves for exploitation, Rose said.
"At this stage, no terms or specific timing of any transaction have been agreed," Rose said.
By Samuel Agini; [email protected]; @samuelagini
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