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Ascent Resources In Warranty Claims Deal With New Shareholder Global Power Sources

Wed, 18th Dec 2013 13:43

LONDON (Alliance News) - Ascent Resources PLC Wednesday said it will issue Global Power Sources srl with 275 million new shares to cover potential warranty claims that have come to light at the Italian business it sold Global Power in July, while it has also welcomed it as a new shareholder after raising GBP1 million in a subscription.

The oil and gas exploration and production company said the potential warranty claims at its former Italian unit had come to light since it sold the business to Global Power in July, but didn't provide details. After taking legal advice, it said it had agreed with Global Power that it would issue the 275 million shares in return for a full waiver of any and all claims or potential claims by Global Power.

Global Power has signed an "Orderly Markets" agreement with Ascent, meaning that any sales of those shares will be done through Ascent's corporate brokers, who will try and undertake the sales in an orderly fashion with least possible impact on the share price.

Global Power will also subscribe to a further 83.3 million shares at 1.2 pence each, raising GBP1 million for Ascent. The shares will be issued in two GBP500,000 tranches in January and February of next year.

Additionally, Ascent has taken out a GBP500,000 six-month loan agreement with Darwin Strategic Ltd. An interest rate of 12% will be charged on any drawdowns.

The subscription funds and any loan drawdowns will be used to fund Ascent as it works towards getting the necessary permits required for gas processing facilities and pipelines at its joint venture Peti?ovci project in Solvenia, in advance of full project finance for the construction phase of the development.

"We are pleased to have resolved the issues surrounding Ascent Italia's assets in a constructive and amicable manner and welcome GPS as a significant and supportive shareholder," Ascent Chief Executive Len Reece said in a statement.

Ascent Resources shares were down 8.3% to 1.1 pence Wednesday.

By Tom McIvor;; @TomMcIvor1

Copyright 2013 Alliance News Limited. All Rights Reserved.

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