Challenger Energy Regulatory News (CEG)

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") (EU) No. 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

27 October 2023

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

Short-term conventional bridge loan to fully repay and cancel thepreviously advised convertible loan note funding facility 

Challenger Energy (AIM: CEG) provides the following update in relation to its financing arrangements:

· The Company has secured a short-term bridge loan of £346,500 (the "Bridge Loan"), the proceeds of which will be applied to immediately redeem in full the drawn and unconverted balance of the previously advised convertible loan note funding facility (the "Funding Facility"), and thereafter permanently cancel that Funding Facility.

· In parallel, the holder of currently issued convertible notes under the Funding Facility has issued a conversion notice in relation to a small portion (£55,000) of the notes on issue, which, in accordance with their terms, will convert by agreement into 100 million new ordinary shares of the Company ("New Conversion Shares").

· The net effect will be that the Company will issue the Conversion Shares, receive £346,500 by way of proceeds from the Bridge Loan, immediately apply those proceeds to fully redeem the remaining balance of convertible notes issued under the Funding Facility, and thereafter permanently cancel the balance of the Funding Facility.

· Key terms of the Bridge Loan are:

· a 12% per annum coupon, accruing monthly;

· a maximum term of 6 months, but with a proviso that the Bridge Loan will be repaid earlier from proceeds received by the Company from either (i) completion of the Cory Moruga asset sale transaction in Trinidad, or (ii) completion of a farm-out of its assets in Uruguay; and

· the Bridge Loan is unsecured.

· The Company will issue warrants to the provider of the Bridge Loan, valid for 36 months, which will entitle the holder of the warrants to subscribe for 250 million ordinary shares in the Company, at an exercise of 0.1p per share, being a premium of approximately 100% to the current share price.

Eytan Uliel, Chief Executive Officer, said:

"Eight weeks ago, we secured a convertible note funding facility for up to £3.3 million. As we explained then, our immediate funding requirement was relatively minimal, in that we were seeking to bridge a short period of time until receipt of expected cash inflows. We thus drew only a small portion of that facility, although we saw value in putting a much larger line of funding in place, in case it was needed it in the future.

However, given the progress in seeing those expected cash inflows in the required timeframe, we have moved to refinance and cancel the facility, and replace it with a more "traditional" loan, with attached warrants.

We will thus continue to have the funds needed to bridge us through the current period, although we will no longer have a bigger facility in place to support us beyond that. Today's transaction will also mean that the item of most concern to our shareholders about the previous convertible facility - the potential for future dilution at unknown value from future conversions and any future facility draw-downs - is removed."

Admission and Total Voting Rights

· Application will today be made for admission ("Admission") of the New Conversion Shares to trading on AIM, which are expected to be admitted on or about 2 November 2023, and it is expected that on Admission the New Issue Shares will rank pari passu with the Company's existing ordinary shares.

· On Admission, the total issued share capital of the Company will consist of 10,494,066,144 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company is 10,494,066,144 and this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

For further information, please contact:

Notes to Editors

Challenger Energy is a Caribbean and Americas focused oil and gas company, with a range of oil production, development, appraisal, and exploration assets in the region. The Company's primary assets are located in Uruguay, where the Company holds high impact offshore exploration licences, and in Trinidad and Tobago, where the Company has a number of producing fields and earlier-stage exploration / appraisal projects.

Challenger Energy is quoted on the AIM market of the London Stock Exchange. 

https://www.cegplc.com 

ENDS