LONDON (Alliance News) - InfraStrata PLC on Friday said it has signed a convertible loan facility agreement with fellow AIM-listed oil and gas company Baron Oil PLC worth EUR1.8 million.
The facility has been signed with respect to the Islandmagee gas storage project in Northern Ireland.
Under the deal, InfraStrata will get a EUR1.8 million loan from Baron, which will be used to bridge the receipt of the European Commission grant for the project.
The loan is subject to an interest rate of 8% of the funds drawn down and is repayable by May 1, 2016. Baron has the right to extend the loan period until December 31, 2016.
Baron will also have an option to convert the balance of the loan into a 15% equity interest in Islandmagee Storage Ltd, the developer of the project.
The two companies have also started talks on Baron potentially participating in the Woodburn Forest-1 well in Northern Ireland.
Baron Oil shares were up 9.1% to 1.20 pence in early trade, one of the best performers in the AIM All-Share. InfraStrata was down 5.0% to 3.80p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Baron Oil (BOIL)