NEWS..........6 Nov 2016 19:00
2016
Tethys Petroleum Press Release Sunday, November 6, 2016 - Proposals to Acquire Shares in Tethys Petroleum Limited
GRAND CAYMAN, CAYMAN ISLANDS--(Marketwired - Nov. 6, 2016) - Tethys Petroleum Limited ("Tethys" or the "Company")(TSX:TPL)(LSE:TPL) today announces that it has received non-binding proposals from private investors, Winston Sanjeev Kumar Soosaipillai and Medgat Kumar (each, an "Investor" and together, the "Investors") to acquire ordinary shares in the Company (together, the "Share Acquisition Proposals").
The key commercial terms of the Share Acquisition Proposals are summarized below. The Share Acquisition Proposals are subject to, among other things, agreement on definitive documentation, completion of legal and financial due diligence by the Investors and receipt of approval from the Toronto Stock Exchange (the "TSX"). The parties do not anticipate any other regulatory or merger control approvals to complete the transactions. The Investors have advised that they expect to be able to complete their due diligence by November 11, 2016, and the Company expects that, subject to satisfaction of the conditions noted above, the placing would close on or about November 11, 2016. If completed, the placements will bring much needed funding to the Company as well as provide it with strong in-country partners in Kazakhstan and internationally.
Summary of Share Acquisition Proposals
The Investors would each acquire 43,951,698 ordinary shares of Tethys which, calculated separately and based on the total number or ordinary shares currently in issue of 400,004,848, would result in each Investor acquiring approximately 9.9% of the enlarged share capital of the Company.
The price for the ordinary shares would be US$0.01593 per share (or CDN$0.02136 based on the November 4, 2016 exchange rate) representing a 24% premium to the volume weighted average price ("VWAP") of CDN$0.01726 for the five trading days to November 4, 2016. The total proceeds would amount to approximately US$1.4 million.
The Company would grant each Investor share purchase warrants giving each Investor the right to acquire up to 43,951,698 ordinary shares of Tethys for a period of three years from the grant date. The exercise price for the warrants would be US$0.031 (or CDN$0.041 based on the November 4, 2016 exchange rate) representing a 138% premium to the VWAP of CDN$0.022 for the five trading days to November 4, 2016.
Neither Investor would be entitled to exercise the warrants if that would result in such Investor and his affiliates holding 10% or more of the then issued and outstanding ordinary shares (after giving effect to such conversion) until such time as the TSX has approved Personal Information Forms ("PIFs") and provided further that only up to an aggregate of 12,098,816 warrants may be exercised by the Investors until such time as shareholder approval has been obta