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LONDON (Alliance News) - Lansdowne Oil & Gas PLC Friday said it has conducted a severely discounted placing in order to keep the company going until next year after terminating the formal sales process after the company received no formal proposals.
The proceeds from the placing will keep the company funded until the middle of next year and the placing was announced in tandem with the company's full year results covering 2015 - which saw the company book a substantially wider pretax loss of GBP15.1 million.
That loss is wider than the GBP1.3 million loss booked in 2014 and was primarily caused by USD14.9 million worth of impairments being booked, with no impairments recorded in the previous year, whilst a small rise in finance costs was offset by a fall in administrative expenses.
Lansdowne launched a formal sales process in April and said it received a number of indicative proposals, but no formal offers, and is now assessing "alternative means of enhancing shareholder value".
The placing raised a total of GBP2.1 million through the issue of 210.0 million new shares priced at 1.0 pence each. Shares are currently suspended but will readmit to trading next Wednesday, and the placing price is a 53% discount to the last trading price of 2.125 pence back in April.
To put the company's need for cash into perspective, Lansdowne only had a cash balance of GBP320,000 at the end of 2015.
Notably, the placing shares represent 43.7% of the company's enlarged issued share capital and both new and existing investors took part in the placing.
Lansdowne has also secured an option which can be exercised on one or more occasions over the next 12 months for Brandon Hill Capital, the placing agent, to find subscribers for new shares in the company to raise a further GBP500,000 - stating those shares would be issued at either 1.0 pence each or at a 10% discount to the company's closing mid-market share price, whichever is lower.
As well as providing working capital until next year, the proceeds will also be used to pay the company's share of costs owed to Transocean for drilling costs.
"The purpose of the placing is to raise proceeds sufficient to fund the company's existing liabilities, including the company's share of the above-mentioned Transocean settlement costs, and on-going working capital requirements to mid-2017, during which time it is hopeful of concluding the SEL 1/11 Barryroe farm-out process," said the company.
In addition, LC Capital Master Fund Ltd has chosen to convert GBP930,000 worth of the GBP1.9 million senior secured loan note provided to the company into shares, taking 93.0 million new shares also priced at 1.0 pence each. Those shares represent 19.4% of the enlarged issued share capital and will push LC Capital's stake up to 28.8%.
That means the placing shares and the shares issued to LC Capital equates to 63.1% of the enlarged issued share capital of the company.
LC Capital has also extended the term of the loan note to the end of this month and reduced the coupon to 5.0% from 10%.
The directors of Lansdowne have also agreed to take shares to settle outstanding amounts owed to them, with five directors taking a total of 14.9 million new shares in the company on Friday.
Commercial Director Richard Slape is one of those directors, and also resigned on Friday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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