25th Apr 2014 08:14
LONDON (Alliance News) - Sound Oil PLC Friday said a new institutional investor is to inject GBP14.0 million into the Mediterranean-focused upstream oil and gas company, with the funds earmarked for its drill programme for the next year, including Nervesa and Badile.
In a statement, Sound Oil said Continental Investment Partners SA will inject the GBP14.0 million at an average price of approximately 9 pence per share, a 69% premium to Thursday's closing share price, subject to due diligence and contract.
Sound Oil shares were Friday quoted at 6.40 pence, up 22%.
The oil and gas company added that it is making progress on potential farm-ins.
Subject to due diligence, contract and shareholder approval, Continental Investment Partners will subscribe for 100.0 million new shares at 8 pence each, which would raise GBP8.0 million before expenses, giving the new investor a 23.41% stake in the company.
As a sign of its commitment to the deal, Continental Investment Partners will immediately subscribe for a GBP1.5 million 3-year loan at a 10% coupon. The investor will be granted 14.4 million warrants to subscribe for new shares in Sound Oil. They are exercisable at a price of 10.4 pence per share. This arrangement will occur prior to any due diligence.
Continental Investment Partners also will provide Sound Oil with a further GBP4.5 million through a further loan on the same terms as the immediate loan. This loan will be made subject to due diligence and contract, as well as shareholder approval of the share issue.
A fee of 5% of the total proceeds of the GBP14.0 million fundraising will be payable to Continental Investment Partners by Sound Oil.
Once the shares, loan notes and warrants are issued, the intention is for Continental Investment Partners to have the right to nominate two non-executive directors to Sound Oil's board. The current intention is for Continental's managing partner, Marco Fumagalli, previously a partner at 3i, to be one of them.
"I am very pleased to welcome Continental Investment Partners as our largest shareholder and first cornerstone institutional investor. The Investor is investing on behalf of private family offices in Italy, Switzerland and the UK. Continental's Managing Partners, Carlo Sgarbi and Marco Fumagalli, are highly supportive of our assets, our published business plan and the team we have built," James Parsons, chief executive, said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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