(Alliance News) - Botswana-focused power company Tlou Energy Ltd said Monday it intends to raise AUD3.0 million, around GBP1.7 million, through an entitlement offer, from which the proceeds will go towards developing the Lesedi coal bed methane project.
Tlou said under the partially underwritten entitlement offer, it will issue up to 75.0 million shares, at a price of AUD0.04, or 2.2 pence per share. Shareholders can subscribe for one new share for every six existing shares held as at Monday next week.
The issue price reflects an 18% discount to Tlou's closing price on Friday at 2.68p. Shares in Tlou were 13% lower at 2.33p on Monday in London.
Proceeds from the offer will go towards detailed engineering and design of the proposed 66 kilovolt transmission line to connect Lesedi to the engineering grid. The money will also be used for due diligence costs, the continuation of current field operations, and general working capital.
Tlou is currently in discussions with development funding institutions which are interested to providing debt or equity to fund the next stage of the project. This will include the drilling of wells, installation of generation assets and the purchase of capital equipment.
"Grid connection is key to get the power project up and running and start revenue generation. Development funding can provide a vital financial platform to help rapidly expand Tlou's generation capability. Successfully completing these two items could prove to be a significant value driver for the company," said Managing Director Tony Gilby.
"We are extremely grateful for the ongoing support of the company shown by its stakeholders and in particular to our long-term shareholders. After many years of hard work, the potential to transform the company from explorer to power producer looks to be coming to fruition and I look forward to building on our success to date," Gilby added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Tlou Energy (TLOU)