(Correcting statement was made on Monday.)
LONDON (Alliance News) - Range Resources Ltd on Monday said it has been informed that all of the necessary government and regulatory approvals have been received which will allow the company to secure its funding package from Beijing Sibo Investment Management LP.
The last hurdle is gaining approval from Range shareholders at the extraordinary general meeting which will be held in August, with a firm date to be declared before the end of July. Shareholders will also vote on a related subscription by the directors of the company.
On May 29, Range executed the definitive subscription agreement with Beijing Sibo, a new Chinese investment vehicle with the purpose of investing in Range. The investors in Sibo are composed of a number of "high net worth individual investors with strong interests in the global energy sector".
In early June, Range received the first tranche of funding, totalling GBP5.2 million, resulting in Range issuing 650 million new shares to Beijing Sibo at the subscription price of GBP0.008 per share, giving it an 11.5% stake in Range. Shareholder approval was not needed for that first tranche.
Under the second tranche, Sibo will subscribe to further shares at the same price as the first tranche, to total a USD22.1 million investment, however the company said the final amount will be confirmed after the EGM.
Following tranche 2, Range will have secured USD30 million from the deal, with a further USD300,000 set to be received from its directors who have agreed to subscribe to shares at the same subscription price.
"Both the board and the management team believe that at the current share price, the company is substantially undervalued against its peers, and are pleased to demonstrate their commitment by participating in share purchases at a substantial premium to the current price," said Range.
Range shares closed down 0.8% to 0.620 pence per share Monday.
The directors investing are Chairman David Chen who is investing USD96,000, Executive Director Yan Liu with USD76,000 and Non Executive Directors Zhiwei Gu and Juan Wang who will invest USD25,000 each.
In addition, Range said it is confident of hitting the 1,000 barrels of oil per day target before the end of 2015 and divesting from its non-core assets.
Range has divested from its entire holding in Citation Resources Ltd, which held some of its licenses in Guatemala. The company said it made AUD220,000 from the sale and said it is looking to dispose of its 20% stake in the Guatemalan project which is currently valued at USD2.2 million.
Range is also continuing to pursue its desire to divest from its project in Georgia, which is currently valued at USD5.0 million. It also holds a 10% carried interest in three exploration blocks in Colombia, which it has written down to nil value on its balance sheet, it said.
In a separate statement Monday, Range said it has filed an appeal against the decision of the Supreme Court of Western Australia regarding the ongoing case with Lind Asset Management LLC.
In early July, Range said its application to the Supreme Court of Western Australia to set aside the USD7.225 million statutory demand made by Lind had not been successful. Lind made the demand back in March under the USD15 million loan facility it extended to Range.
The repayment was due last Friday, but as the company has appealed the repayment date has been pushed back to August 31, or until the court makes a further decision. The appeal will take place on August 10, it said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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