LONDON (Alliance News) - Range Resources Ltd Friday said its shares will resume trading next week after the company received the first tranche of funds from the financing deal agreed with Beijing Sibo Investment Management LP.
On May 29, Range executed the definitive subscription agreement with Beijing Sibo, a new Chinese investment vehicle with the purpose of investing in Range, for funding of up to GBP35 million. The investors in Sibo are composed of a number of "high net worth individual investors with strong interests in the global energy sector".
On Friday, 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, which represents a premium of approximately 48% to the last traded share price of the company prior to the suspension of Shares from trading on AIM on December 11, 2014.
Beijing Sibo now holds an 11.5% stake in Range following the transaction.
The company said it does not need shareholder approval to issue the first tranche of shares to Beijing Sibo, but said the remaining shares to be issued will require shareholder approval. Range plans to hold a meeting before November 30 to seek approval for the issue of the remaining shares.
The company's shares were originally suspended after Lind Asset Management LLC called in a loan from Range that it could not repay, which led to a USD60 million financing deal with Core Capital falling through before it sealed the deal with Beijing Sibo.
As a result, Range now has "sufficient funds" to repay amounts demanded under the Lind facility and as a consequence, the company's financial position is now "clarified". Range has therefore requested its shares resume trading on AIM from Monday next week.
Range's shares on the Australian Securities Exchange also are suspended, and discussions are ongoing to get them trading again, the company said.
The remaining funds from Beijng Sibo, which will be a minimum of GBP12 million and a maximum of GBP27 million, will be provided in cash no later than August 31, 2015.
Range said if the maximum USD35 million is provided, Beijing Sibo will hold around a 36% stake in the company.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.