Celsius Resources Limited Regulatory News (CLA)

20 Dec 2005 13:00

Cordillera Resources PLC20 December 2005 20 December, 2005 CORDILLERA RESOURCES PLC ("Cordillera" or the "Company") ACQUISITION Cordillera Resources Plc (the AIM listed company (Ticker: CLA)) today announcesthat it has entered into an agreement ("Agreement") to acquire ContinentalPetroleum Limited ("Continental") which owns a majority interest in two licensedoil and gas exploration projects in Western Siberia, Russia ("Acquisition").The Acquisition is conditional upon, amongst other things, completion by bothparties of satisfactory due diligence and approval by Cordillera shareholders. It is proposed that there will be a consolidation of the Company's existingordinary share capital prior to completion of the Acquisition. Each existingordinary share of 0.2p per share will be consolidated on a 1 for 15 basis,thereby increasing the par value of the Company's ordinary shares to 3p pershare ("New Ordinary Shares"). The initial consideration for the acquisition will be up to 100 million NewOrdinary Shares in the Company ("Initial Consideration Shares"), with up to twofurther tranches of 16,666,667 New Ordinary Shares ("Further ConsiderationShares") to be issued to ECO3 Capital Limited ("ECO3"), one of the vendors, uponthe confirmation from an independent competent person that there are provenreserves of 50 mmbbls of oil equivalent and 150 mmbbls of oil equivalent,respectively contained within the exploration blocks. 24,000,000 warrantsexercisable at £1.20 per New Ordinary Share will also be issued to ECO3, inexchange for warrants currently held by it in Continental. Assuming that all ofthe Initial Consideration Shares are issued to the vendors, the vendors willhold 87.72% of the enlarged issued share capital of the Company followingcompletion of the Acquisition. In the event that the Further ConsiderationShares are also issued, the vendors will hold 90.50% of the issued share capitalof the Company following completion of the Acquisition. Following completion ofthe Acquisition, ECO3 will hold a controlling shareholding of 55.60% of theissued share capital of the Company, which would increase to 65.65% were all theFurther Consideration Shares to be issued to it. The Company proposes to seek agrant of waiver from the Panel on Takeovers and Mergers of any obligationsarising from the Acquisition under Rule 9 from the City Code on Takeover andMergers. On the basis of the closing mid-market price of a Cordillera share of 3.88p eachon 19 December 2005, being the business day immediately prior to the date ofissue of this announcement, and on the assumption that 100 million New OrdinaryShares are issued to the vendors of Continental, this values each share inContinental at £11.64 each and the entire issued share capital of Continental at£58.2m. Upon completion of the Acquisition, it is proposed that all the Directors of theCompany will resign, save for Mal James, and the current directors ofContinental, the Honorable Charles Balfour and Alexander Shadrin (who is alsoChief Executive Officer of ECO3 Capital) will be appointed to the Board.Additional Board appointments are envisaged and a number of candidates arecurrently being considered. On completion of the Acquisition, the Company willchange its name to Continental Petroleum Plc. The Acquisition represents a "reverse" transaction under the AIM Rules, andaccordingly the Company has requested that the existing Cordillera shares willbe immediately suspended from trading until either (a) the Company publishes anAdmission Document (expected to be early in 2006) or (b) the Company elects notto proceed with the Acquisition in accordance with the terms of the Agreement. The Company anticipates that the due diligence process will be completed withinseven weeks and that shareholder approval will be sought at an extraordinarygeneral meeting to be held as soon as reasonably practicable thereafter. For further information please contact: Mr Colin Orr Ewing - Chairman of Cordillera Resources plc.0207 352 4117 Mr Hugh Oram - Nabarro Wells & Co., Nominated Adviser0207 710 7400 This information is provided by RNS The company news service from the London Stock Exchange