LONDON (Alliance News) - New World Oil & Gas PLC Friday said shareholders have backed its plans to begin pursuing opportunities outside of the oil and gas sector as it progresses its proposed reverse takeover of technology firm Big Sofa Ltd.
Shareholders backed the company's plans at an extraordinary general meeting held earlier Friday, which has allowed New World to supply the second tranche of the loan provided to Big Sofa as a precursor to the deal.
New World Oil underwent significant change in the second half of 2015 after a shareholder action group successfully called for a board reshuffle. This led to a prolonged period of inactivity on the operational front as the company moved away from the natural resource sector.
The company relinquished its oil and gas licenses in Denmark late last year and was left with only the Blue Creek project in Belize. However, New World has said it plans to offload that asset as well, so it can exit the sector altogether.
Moving in an completely different direction, New World signed a non-binding letter of intent to buy Big Sofa Ltd, a company which started out as a marketing consultancy firm before developing into its current state as a technology services company focused on video and image analytics.
If the two companies merge, New World shareholders would own around 45% of the enlarged group.
New World plans to retain its assets in Belize in the meantime but has said the board will "consider withdrawing from its oil and gas activities" if the Big Sofa deal is completed.
Big Sofa uses visual data technology developed internally to provide customer and consumer insights to its clients. By managing and analysing visual data on a large scale, the company enables its clients to understand how consumers interact with products and services.
New World agreed to provide Big Sofa with a short-term loan, carrying a 6.0% coupon, of up to GBP500,000, which could be drawn down in two equal tranches, the first of which was supplied immediately.
Following shareholder approval Friday, New World said it can now release the second tranche to Big Sofa, and said it will publish another announcement when that tranche has been drawndown.
Importantly, New World said prior to the EGM on Friday that the meeting will be followed by a fundraising, with both existing shareholders and new investors to finance the development of the group going forward.
New World shares remain suspended from trading due to the possible reverse takeover.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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