(Alliance News) - ADM Energy PLC shares jumped on Monday after it said it has raised around GBP725,000 through a subscription and loan, and announced that its Chief Executive Osa Okhomina plans to step down.
ADM said it has raised GBP500,000 via a subscription of 41.7 million new shares to Tennessee Black Gold LLC at a price of 1.2 pence each. This represents a premium to the shares closing price of 0.55p on Friday, being the last business day before this announcement.
Shares in the London-based natural resource investor were up 18% to 0.65 pence each in London on Monday around midday.
Of the proceeds, GBP100,000 has been remitted with the balance of GBP400,000 due by October 28.
ADM said it intends to use the proceeds primarily to reduce outstanding creditors and for "general working capital purposes." It noted that it will not use the proceeds for the acquisition of any assets.
The company added that it has begun a review of its operations to implement a cost reduction programme and take "proactive steps" to deliver shareholder value.
ADM has also signed a USD250,000 loan with Tennessee Black Gold, which will be advanced in five instalments of USD50,000 each. The first instalment will be due on October 28 and the last one on February 28, 2023.
The loan will mature on October 28, 2024, and on that date the full principal amount along with accrued and unpaid interest will be due in cash. The interest rate will be 6.0% per annum.
Further, ADM said that Chief Executive Osa Okhomina plans to step down upon receipt of the subscription proceeds, expected to be by October 28.
Okhomina joined ADM in July 2019 as CEO.
The company will now begin the recruitment process to appoint his successor, whilst the role will be fulfilled by existing directors in the interim period.
In addition, under the terms of the subscription, Tennessee Black Gold has the right to appoint two directors to the board.
Chair Oliver Andrews said: "We are pleased to announce the closing of this funding round at 1.2p per new ordinary shares. This reflects the view of us all of the underlying value of the company. We welcome Tennessee Black Gold as our new shareholders and look forward to working with them to deliver shareholder value.
"On behalf of ADM, I would like to thank Osa for his contribution to the company and his years of dedicated service," Andrews added.
By Sophie Rose; sophierose@alliancenews.com
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Adm Energy (ADME)