More info30 Jul 2024 20:48
'Following on from queries directed at the prospectus for our RTO into MMM (who are effectively purchasing the whole share capital of Georgina), we have decided to clarify how the directors of the group will be rewarded post-RTO, and how this was decided.
We are doing this because we wish to be completely transparent about the opportunity, and also give investors all the information that they need, especially those wishing to make an investment but are perhaps concerned with how the RTO has been structured.
In particular, we would like to shed light on the performance shares to the Georgina Principals, which are deferred on set milestones.
Georgina Energy has been quietly developing under the radar for the past five years. Founding directors and shareholders have invested over £6 million into the company to provide working capital — and of this amount, some £2.5 million has been personally invested by the founding directors.
£1.2 million of this £2.5 million comprises an unsecured director’s loan which will need to be repaid, but this is expected to be when the share price is significantly higher than it will be at the RTO.
For context, repayment for this unsecured loan can only be repaid or converted into shares at a minimum of two years from now. This serves two purposes — it should help prevent any negative impact on investor appetite that might arise from a high pre-money valuation if the loan had been converted before the RTO — and is also strong evidence that the directors believe they will get this money back in two years’ time.
For further evidence of management commitment, directors have not taken a salary since the company was founded back in 2019. For proof, you can visit our website and view our audited accounts.
The performance shares will be subject to escrow and restrictions as they form part of the Management Control Group — which adopts a long-term perspective with the objective of transforming Georgina Energy into a world-class production company.
Management does not intend to release these shares into the market. Once issued they will be subject to a lock-up period, and therefore the supply and demand dynamic will not change as the ‘effective’ free float will be unaffected.
The decision by the Corporate Advisors and the Company to align the Directors' interests with those of seed and RTO investors ensures that the Directors are incentivised to meet investor expectations. This includes drilling our seismically defined, previously drilled assets, which present a distinctly derisked profile compared to greenfield exploration.
The Directors have provided a clear path to production and anticipate a significant uplift in value as a result of the drilling and work programs planned post-RTO (subject to any identified risks as identified and also published in the prospectus).
We consider that issuing additional shares to cover Directors’ sunk costs would have
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