LONDON (Alliance News) - Independent Oil and Gas PLC said the general meeting due to be held later Friday where shareholders will vote on an equity deal will still go ahead as planned despite the final amount of a related debt funding still not being disclosed.
Independent Oil shares were down 11% to 14.94 pence per share on Friday morning.
Earlier in July, the company said it was trying to secure a long-term financing deal which will be split between equity and debt funding from an unnamed potential funder which Independent Oil called "an internationally listed group with a multi-billion dollar market capitalisation".
The funder is expected to subscribe for 30 million shares in the company at 23.79 pence per share, raising approximately GBP7.1 million for the company. The funder would take a 29.9% equity stake in the company as part of the agreement.
Originally, the company expected to complete the equity transaction first and then secure a related debt facility around two months later, but on Friday said these two deals will now happen simultaneously in middle to late August, which it admits is behind the original schedule.
Those deals are being conducted to fund the acquisition of a 50% stake in the Skipper license offshore the Shetland Islands and the funding required to participate in the work programme. However, the total amount of debt funded needed is "still under discussion", it said.
"The amount of the initial debt funding is still under discussion. The company is prioritising completion of the acquisition of 50% of the Skipper licence and funding 100% of the commitment well including contingency," it said.
Although the company does not require shareholder approval for the debt facility, shareholders will vote at a general meeting later Friday to approve the equity part of the deal.
"Accordingly the general meeting will proceed today as planned whereby shareholders will be asked to approve the resolutions as set out in the RNS on Independent's website dated 8 July 2015 which includes a link to the circular.
"We are still encouraged by the funding discussions, but finalising the size and terms of the debt commitment has taken a little longer than expected. The Independent Oil and Gas team is working hard to ensure we agree the best deal for its shareholders," added Chief Executive Mark Routh.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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