Adm Energy Regulatory News (ADME)

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

13 September 2019

ADM Energy PLC 

("ADM" or the "Company") 

Posting of Circular and Notice of General Meeting

Further to the announcement of 11 September 2019, ADM Energy PLC (AIM:ADME), an oil and gas investing company quoted on AIM, announces that it has posted a circular to shareholders convening a General Meeting (the "Circular"), the purpose of which is to seek shareholder approval of the resolutions to be proposed at the General Meeting.

The General Meeting will be held at the offices of Keystone Law Ltd, 48 Chancery Lane, London WC2A 1JF at 10.00 a.m. (UK time) on 30 September 2019.

Extracts from the Circular are set out below and should be read in conjunction with the Circular. A copy of the Circular will shortly be available from the Company's website: www.admenergyplc.com 

Directors: Registered Office:

Richard Carter (Chairman) 17th Floor

Osamede Okhomina (Chief executive officer) Dashwood House

Stefan Olivier (Director) 69 Old Broad Street

Sergio Lopez (Non-Executive Director) London

EC2M 1QS

13 September 2019

To holders of ordinary shares of 1 pence each in the capital of ADM Energy plc ("the Company") and for information purposes to holders of warrants.

Dear Shareholder

GENERAL MEETING

CONDITIONAL SHARE SUBSCRIPTION AND ISSUE OFWARRANTS TO SUBSCRIBE FOR ORDINARY SHARES

Introduction

I am pleased to invite you to a General Meeting which will be held at the offices of Keystone Law Ltd, 48 Chancery Lane, London WC2A 1JF at 10.00 a.m. (UK time) on 30 September 2019.

The business to be conducted at the General Meeting is set out in the notice of General Meeting at the end of this document ("Notice"). The Company is proposing resolutions to enable the Company to issue shares and warrants as described below. You will be asked to consider and vote on the resolutions set out in the Notice. An explanation of these resolutions is set out below.

The Board very much hopes you will be able to attend the General Meeting and we look forward to having the opportunity of speaking with you. We do however appreciate that it is not always possible for shareholders to attend in person. Even though you may not be able to attend, your vote is still important, and I would urge you to complete, sign and return the proxy form sent to you with this Notice and return it to Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, as soon as possible. They must receive it by 10.00 a.m. (UK time) on 28 September 2019. Please refer to the Shareholder Notes on pages 8 and 9 of this document for more details.

Subscription and issue of warrants

The Board of ADM Energy plc announced on 11 September 2019 a capital raising of £832,000 (before expenses) to be used by the Company for general working capital purposes and to allow the Company to appraise further investment opportunities and to provide funds for investment. This is being effected by means of a subscription for 11,885,713 new ordinary shares of 1 pence each ("Ordinary Shares") in the Company ("Subscription Shares") at a price of 7 pence ("Subscription Price") per Subscription Share ("Subscription").

A total of £269,640, representing the issue of 3,852,000 of the Subscription Shares ("Initial Subscription Shares"), to Zark Capital Ltd ("Zark"), has been raised pursuant to the Company's existing share authorities. The Initial Subscription Shares are expected to be admitted to trading on the AIM market of the London Stock Exchange on 17 September 2019.

The balance of £562,359, representing the issue of 8,033,713 of the Subscription Shares ("Conditional Subscription Shares"), is conditional upon shareholder approval through the passing of certain resolutions ("Resolutions") to be proposed at a general meeting of the Company to be held at the offices of Keystone Law Ltd, 48 Chancery Lane, London, WC2A 1JF on 30 September 2019 at 10.00 a.m. ("General Meeting") and admission to trading on the AIM Market of the London Stock Exchange ("Admission"). Subject to admission of the Initial Consideration Shares expected on or around 17 September 2019, the Company's issued share capital will comprise 53,615,497 ordinary shares of 1 pence each ("Enlarged Issued Share Capital").

Following the issue of the Initial Subscription Shares, Zark will hold 3,852,000 ordinary shares, representing 7.18 per cent. of the Company's Enlarged Issued Share Capital. Subject to shareholder approval at a general meeting to be convened, following the issue of the Conditional Subscription Shares, Zark will hold 6,000,000 ordinary shares, representing 9.73 per cent. of the so enlarged issued share capital of the Company assuming no further issue of shares between the date of this letter and the General Meeting.

Conditional upon Admission of the Conditional Subscription Shares to trading on AIM and the approval of the directors of the Company and the Company's nominated adviser, Zark shall be entitled to appoint one person as a non-executive director of the Company on terms to be approved by the Company.

Zark, which is authorised and regulated by the FCA, is an independent brokerage boutique firm offering bespoke advisory and execution services with strong experience in broking, trading, financial risk management, and mergers & acquisition consultancy in both financial and physical commodities. Zark has clients all over the world covering all types of activities including utilities, banks, producers, funds, trading houses and some end-users.

Subject to the passing of the Resolutions, it is expected that Admission of the Conditional Subscription Shares will become effective and that dealings will commence on or around 4 October 2019. Upon admission of the Subscription Shares, the enlarged issued share capital of the Company will comprise 61,649,210 ordinary shares of 1 pence each.

In conjunction with the issue of the Subscription Shares and conditional grants of other warrants, the Company has agreed, conditional upon shareholder approval, to issue to investors warrants to subscribe for new Ordinary Shares in the Company at an exercise price of 8 pence ("Warrants"). The Warrants may be exercisable no earlier than 6 months and no later than 2 years after the date of their issue.

The issue of the Conditional Subscription Shares and the Warrants are conditional upon the passing of the Resolutions by shareholders at the General Meeting to authorise the allotment of the Conditional Subscription Shares and the Warrants and to approve the disapplication of pre-emption rights to enable the Board of ADM Energy to allot the Conditional Subscription Shares and the Warrants. The Board has convened the General Meeting at which shareholders in ADM Energy will be asked to consider and, if thought fit, pass the Resolutions.

It is expected that, upon the passing of the Resolutions at the General Meeting, application to the London Stock Exchange for the Conditional Subscription Shares will be made shortly thereafter and dealings in the Conditional Subscription Shares will commence on or around 4 October 2019. Subject to the passing of the Resolutions and Admission becoming effective, the Conditional Subscription Shares will rank pari passu with the existing issued ordinary share capital of ADM Energy.

The Initial Subscription Shares will be equivalent to approximately 7.18 per cent. of the Enlarged Issued Share Capital of ADM Energy following their Admission and the Conditional Subscription Shares will be equivalent to approximately 13.03 per cent. of the so enlarged issued share capital of ADM Energy following their Admission. The Company has outstanding 6,075,000 warrants, which represents approximately 11.33 per cent. of the Enlarged Issued Share Capital of ADM Energy. Following issue of the Warrants and Conditional Subscription Shares, the Company will have 20,949,601 warrants outstanding which will be equivalent to approximately 33.98 per cent. of the so enlarged issued share capital of ADM Energy. In all cases, the calculations above assume no further shares issues between now and the relevant grant or admission dates.

Orderly Market Undertakings

Each of the investors have undertaken to the Company that for a period of 3 months following each of the Admission of the Initial Subscription Shares, the Admission of the Conditional Subscription Shares and the Admission of any Ordinary Shares issued following an exercise of Warrants that they will not without the consent of the Company dispose of any interest in the Subscription Shares or Ordinary Shares issued following exercise of the Warrants other than through the Company's brokers in such manner as to ensure an orderly market in the Company's shares shall be maintained.

Increase in General Authorities

The Company recognises that, in order to grow the value and number of its investments, it will require further funds to invest. The Company anticipates that its Aje investment should generate free cash flow at the project level following the 13th lifting which is expected to be in Q1 2020. As a result, the Company may be able to attract more varied and more sizable funding than it has been able to in the past which may include equity, regular or convertible debt and production based lending. In order to allow the Company the flexibility to raise more significant funds and to allow it to consider any such funding proposals quickly, the Company is seeking to increase its general authorities, and to disapply pre-emption rights, by 300 per cent. of the Company's so enlarged issued share capital. The authority shall expire on the earlier of the conclusion of the Company's Annual General Meeting in 2020 and the anniversary of the General Meeting unless previously cancelled or varied by the Company in general meeting.

Information relating to the Resolutions

Resolution 1 - Authority to allot Conditional Subscription Shares and Warrants

The purpose of this Resolution is to renew the Directors' authority to allot shares or grant rights to subscribe for or to convert any security into shares in the Company. Section 551 of the Companies Act 2006 provides that the Directors may not allot new shares (other than for employee share schemes) without shareholder approval. This Resolution proposes that a new authority be granted in substitution of all other existing authorities, to allot securities up to an aggregate nominal amount of £229,083.14, to enable the Company to allot the Conditional Subscription Shares and issue the Warrants.

The authority shall expire on the earlier of the conclusion of the Company's Annual General Meeting in 2020 and 30 September 2020 unless previously cancelled or varied by the Company in general meeting.

Resolution 2 - Renewal of general authority to allot shares

The purpose of this Resolution is to renew the Directors' authority to allot shares or grant rights to subscribe for or to convert any security into shares in the Company. This Resolution proposes that a further authority be granted in substitution of all other existing authorities (other than pursuant to Resolution 1), to allot securities up to an aggregate nominal amount of £1,849,476, to enable the Company to allot up to approximately three hundred per cent. of the Company's so enlarged issued ordinary share capital following the issue of the Subscription Shares, assuming that no other ordinary shares are allotted and issued by the Company between the date of this document and the General Meeting. The Company is seeking this approval to enable the Company to take advantage of investment opportunities which may arise in the future.

The authority shall expire on the earlier of the conclusion of the Company's Annual General Meeting in 2020 and 30 September 2020 unless previously cancelled or varied by the Company in general meeting.

Resolution 3 - Disapplication of pre-emption rights to enable the issue of the Conditional Subscription Shares and the Warrants

Section 561(1) of the Companies Act 2006 provides that if the Directors wish to allot any equity securities, or sell any treasury shares (if the Company holds any), for cash, they must first offer them to existing shareholders in proportion to their existing shareholdings. Section 561 does not apply in connection with an employee share scheme. The purpose of this Resolution is to allow the Directors to allot equity securities or sell any treasury shares for cash as if Section 561(1) of the Companies Act 2006 does not apply pursuant to the authority granted by Resolution 1, in connection with the issue of the Conditional Subscription Shares and the Warrants.

The authority shall expire on the earlier of the conclusion of the Company's Annual General Meeting in 2020 and 30 September 2020, unless previously cancelled or varied by the Company in general meeting.

Resolution 4 - Disapplication of pre-emption rights to provide additional authority to issue equity securities

The purpose of this Resolution is to allow the Directors to allot equity securities or sell any treasury shares for cash as if Section 561(1) of the Companies Act 2006 does not apply, in connection with rights issues, open offers, the issue of options to employees and officers and other pre-emption offers pursuant to the authority granted by Resolution 2, and otherwise up to an aggregate nominal amount of £1,849,476, representing approximately three hundred per cent. of the Company's so enlarged issued Ordinary Share capital following the issue of the Subscription Shares, assuming that no other ordinary shares are allotted and issued by the Company between the date of this document and the General Meeting.

The authority shall expire on the earlier of the conclusion of the Company's Annual General Meeting in 2020 and 30 September 2020, unless previously cancelled or varied by the Company in general meeting.

Action to be taken

It is important to the Company that shareholders have the opportunity to vote even if they are unable to attend the General Meeting. You will find enclosed with this document a proxy form for use at the General Meeting. Whether or not you propose to attend the General Meeting in person, you are requested to complete the proxy form and return it to the Company's registrars, Computershare Investor Services plc, so as to arrive no later than 10.00 a.m. (UK time) on 28 September 2019.

If you hold your shares in CREST, you may appoint a proxy or proxies by completing and transmitting a CREST Proxy Instruction to Computershare Investor Services plc as soon as possible and so that it is received by no later than 10.00 a.m. on 28 September 2019.

The completion and return of the proxy form or the transmission of a CREST Proxy Instruction will not affect your right to attend and vote in person at the General Meeting if you wish.

Recommendation

The Directors consider that all the proposals to be considered at the General Meeting are in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of all of the proposed resolutions, as they intend to do in respect of their own beneficial shareholdings.

Yours faithfully

Richard CarterChairman