LONDON (Alliance News) - Range Resources PLC Friday said it has executed the definitive subscription agreement with Beijing Sibo Investment Management LP for funding of up to GBP35 million.
Beijing Sibo is a new investment vehicle headquartered in the Chinese capital. It was set up for the purposes of investing into Range. The investors in Sibo are composed of a number of "high net worth individual investors with strong interests in the global energy sector", Range Resources said.
Range said the subscription price is the same as the previously proposed USD60 million funding deal with Core Capital Management Co Ltd which fell through on May 14 after being snagged by delays.
Range has started its drilling campaign in Trinidad, which is being initially funded by the extended 12 month credit facility with Range's strategic partner LandOcean Energy Services Co Ltd. Range is also exploring the St Mary's and Guayaguayare blocks in Trinidad. The new equity funding from Beijing Sibo "will help to ensure that the company has access to adequate funding to ramp up these extensive operational activities, as well as provide working capital", it said last week.
The funding also will be used to repay the outstanding debt facility with Lind Asset Management LLC. In February, Lind demanded the repayment of USD7.2 million that Lind claimed was due under the USD15 million loan facility provided to Range.
The company had a six-month period to satisfy the Australian Securities Exchange and AIM about its financial position, meaning that it had until June 11 to resolve its funding issues or its shares would have been cancelled.
Range will now issue an initial tranche of around 550 million new shares at the GBP0.008 per share price, representing a value of around GBP4.4 million. The company said it does not need shareholder approval to issue the first tranche of shares, but said the remaining shares issued to Beijing Sibo will require shareholder approval. Range plans to hold a meeting before November 30 to seek approval for the issue of the remaining shares.
Once the initial tranche of shares has been issued, Beijing Sibo will hold 9.7% of the enlarged share capital of the company. Range said if the maximum USD35 million is provided, Beijing Sibo will hold around a 36% stake in the company, but the final amount provided under the deal and the amount of shares issued will be determined when the deal is signed.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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