30th Jan 2015 18:34
LONDON (Alliance News) - Sefton Resources Inc Friday said it has raised GBP80,000 by issuing 160.0 million new shares subscribed to by a group of eight individual investors at 0.05 pence per share, with one of them set to join the board and work on a new strategy.
In a statement, Sefton said the share issuance is the first part of a turnaround plan for the company, following the previously reported refinancing agreed with Hawker Energy Inc and Bank of the West.
The shares will represent 14.95% of the company's shares.
Seftons aid that it will be in a position of generating no operational cash flow due to the proposed sale of subsidiary TEG USA Inc and the drop in oil prices.
"The company therefore has a requirement to generate working capital from non-operational sources in the short term in order to meet its ongoing costs and liabilities; this includes the immediate costs of maintaining the company's AIM quotation, with the monies raised principally being used to pay accrued liabilities related to this," Sefton said.
"The board, in consultation with Allenby Capital Ltd, its nominated adviser, has concluded that the subscription provides the best opportunity to achieve this in the short term while the security agreement with the Bank of the West remains in place, which currently provides that the proceeds of any asset sales be applied to reduce the outstanding balance of the loan from the bank," Sefton said.
"The subscription was the only option that the company has been able to locate that provided the working capital required to meet its immediate liabilities," Sefton said.
Daniel Levi, who subscribed for 21.7 million of the new shares will join the board as an executive director from Monday.
"This is expected to be an interim role, with Mr Levi leading efforts to identify a new strategy for the company, recruit a new team to implement this strategy and work on the next stage of the turnaround of the company," Sefton said.
Sefton shares closed up 4.3% at 0.156 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
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