(Alliance News) -Â President Energy PLC on Wednesday said commodity trader Trafigura will increase its stake in the firm amid plans to reduce debt and raise USD3.1 million in a placing.
Shares in President closed up 2.1% at 2.40 pence in London on Wednesday.
Trafigura has agreed to "substantially" increase its stake in President via a subscription of USD6 million for 258.7 million shares at a price of 1.85p each.
IYA Global Ltd - a company beneficially owned by President Energy Chair Peter Levine - has stated that it intends to convert at least USD4.1 million of debt under an existing unsecured loan facility between it and President into shares in the company also at a price of 1.85p each.
Trafigura will hold just over 18% of the company's enlarged share capital and Levine - through his investment vehicles - will hold just under 30%.
"The net effect of the subscription and the conversion will be to reduce net debt of the group by a minimum of approximately USD10.1 million resulting in a reduction of at least USD16 million in the calendar year to date with third party financial debt (excluding IYA) now only USD3.7 million," said President.
It is also raising up to USD3.1 million at a price of 1.85p per share via a placing of up to 134.6 million shares.
In addition to the placing, there will be an offer on PrimaryBid, also at 1.85p share, to "provide existing shareholders and retail investors with an opportunity to participate". The PrimaryBid offer will not be completed without the placing also being completed, the firm said.
"We are pleased that Trafigura has expanded their interest in the company, thereby having a major interest in the future growth and success of our group," said Levine.
"In difficult times for our industry, there will always be those, perhaps the few, who rise to the challenge and come through it the better and stronger for it being able to grasp opportunities as they arise," Levine said. "President is now well placed to be one of those."
President is looking to get the necessary shareholder approvals for the measures at a general meeting on June 22.
By Lucy Heming;Â lucyheming@alliancenews.com
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