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LONDON (Alliance News) - Ascent Resources PLC Monday said it plans to start legal proceedings if it fails to receive planned equity funding and experiences a loss to its financing plans, while permitting for its Peti?ovci project in Slovenia is taking longer than expected.
In July, the independent oil and gas exploration and production company said its planned subscription of GBP15 million in equity funding has not been completed after the investor failed to receive key funds required to make the cash transfer.
The company said at the time that Global Power Sources SrL, a company which agreed terms to the major investment in May via a subscription for new shares at a price of 0.8 pence each, has not received key payments from its joint venture partner, Salomon Partners WRS Werner Rothschild & CIE Ltd, in order to complete the initial subscription payment.
Global Power Sources told Ascent that the transfer could not be completed as Salomon Partners failed to receive regulatory clearances and, as a result, the subscription has not been completed.
A condition of the subscription was that up to GBP7.4 million of the proceeds of the first tranche would be used to fund an offer by the company to holders of its 2013 convertible loan notes to repurchase and cancel up to 50% of the outstanding principal amount of the loan notes, at a price of 300 pence per GBP1 of principal.
As a result of the subscription not being completed, the conversion and redemption of its 2013 and 2014 convertible loan notes has also not yet taken place.
On Monday, Ascent said that GPS has started legal proceedings against WRS for non-performance of its obligations, which meant it did not receive the key funds necessary to pay Ascent.
The company also said that it believes GPS is doing all it can to improve the situation but that it plans to start legal proceedings against GPS and others in the event that it has to pursue a different funding plan and a loss incurs.
Ascent said this could happen if the alternative funding is raised on less favourable terms, or due to the costs associated with the subscription.
GPS currently holds 21.1% of the issued share capital of Ascent, and on a fully diluted basis would hold 11.4%, making it the company's second largest shareholder.
The company also announced that the permitting phase of its Peti?ovci project in Slovenia is taking longer than expected due to changes in the circumstances of the project and the permitting regulations, but also in part due to what it called 'the exceptional level of technical detail required by the Slovenian authorities'.
Ascent said that the decision to build a new high voltage power line near its gas processing plant resulted in several months delay and further delays have been caused by considerable uncertainty and conflicting legal advice on the applicability of new EU regulations regarding competitive tendering for all parts of the construction phase for a new gas processing plant.
The company said its expectation is that the permitting required for phase one of the Peti?ovci project will be put to public consultation early in the first quarter of 2015.
However, the company did note that it has reached advanced stages of discussions over offtake agreements for the site and has submitted its integrated pollution prevention and control permit for the site, among other development achievements.
Ascent Resources shares were down 4.8% to 0.500 pence on Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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