LONDON (Alliance News) - Natural resources investor Highlands Natural Resources PLC on Wednesday said it has struck a deal to sell its helium assets to AIM-listed Opera Investments PLC, as Highlands posted a loss for the financial year that ended in March.
Later in the morning, Highlands then announced Diversion Technologies LLC is to sell its entire stake in the company to an unnamed institutional investor.
Highlands and Opera have reached a heads of terms agreement under which Opera will acquire Highlands Helium Development Ltd, which owns the Helios Two helium and natural gas project in the US state of Montana.
Opera will acquire the assets for a total of GBP4.0 million. This will include Opera issuing shares to Highlands at 15.00 pence per share, plus an equity financing to raise not less than USD750,000 to fund future investment and working capital requirements for the assets. In addition, Opera will reimburse Highlands for all costs it has incurred on the project.
For Opera, which only has a GBP1.3 million market capitalisation, the deal will constitute a reverse takeover under AIM rules, meaning its shares have been suspended. They were last quoted at 7.50p.
"This transaction reflects Highlands' intention to generate value for shareholders from its exciting asset base in tandem with focussing on its DT Ultravert business that is looking to transform the global re-fracking business," said Highlands Chief Executive Robert Price.
"These heads of terms with Highlands move Opera one important step closer to acquiring a valuable development-ready asset. Given broad concerns around helium scarcity and price increases, the Opera management team views the Helios Two assets as a highly compelling development opportunity that fits well with its existing strategy and core competencies," said Paul Dudley, Opera's chairman.
Later on Wednesday, Highlands said Diversion Technologies has agreed to sell 30.0 million warrants it holds over Highlands shares to an unnamed investor. Diversion had been granted the warrants as part of the consideration paid by Highlands to acquire a 75% stake in pending patents for DT Ultravert, the re-fracking technology which forms the focus of Highlands' operations.
The warrants are convertible into Highlands shares at 25.00p per share. If the institutional investor takes up its options to acquire the entire holding through exercising the warrants, it would raise GBP7.5 million for Highlands.
Highlands said the deal is potential significant to its development at Diversion did not have the funds to exercise the warrants but the structure of the arrangements with the institutional investor specifically focus on the potential for the warrants to be exercised.
The moves came as Highlands said it made a pretax loss of GBP1.8 million for the period from its incorporation on November 13, 2014 to the end of March 2016. It made no revenue in the period.
Highlands shares were down 15% to 39.50p mid-morning on Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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