ECHO.L Regulatory News (ECHO)

FOR IMMEDIATE RELEASE

25 May 2016

Independent Resources plc

("IRG" or the "Company") 

Additional creditor reduction arrangements

Financial update

Following its announcement of 10 May, 2016, IRG is pleased to announce that it has made further substantial progress in improving its financial position through reducing its indebtedness by a further £305,000 to approximately £230,000 (unaudited).

Key points:

· Settlement of £148,000 of trade creditors through the payment in cash of £28,500 and the issue of 69,428,571 new ordinary shares of 0.01p each in the Company which represents an effective equity conversion price of approximately 0.17p per Share and a premium of 227 per cent to the closing share price of 0.0525p on 24 May 2016;

· A further c.£96,000 debt reduction, through one of the Company's directors ("Director") accepting, in principle, payment in Shares for past services, at a price yet to be agreed, but which is intended to be at a significant premium to the Company's pre-announcement share price of 0.0525 pence per Share;

· c. £36,000 reduction in trade creditors through a trade creditor agreeing to accept Shares in payment of this sum at the same price as Shares issued to redeem the Company's £200,000 of convertible unsecured loan notes and any accrued interest thereon, the terms of which were announced to the market on 17 May 2016;

· c. £25,000 reduction in trade creditors through certain creditors agreeing to accept cash payments of £57,000 in settlement of indebtedness with a face value of £82,000; and

· Arrangements have been made with creditors representing a significant portion of the remaining trade creditor balances to defer payment until IRG receives revenues from EGPC in relation to its interests in East Ghazalat which the Company expects to be well in excess of the outstanding creditors.

Reduction in creditors

On 10 May the Company announced it had secured agreements with a number of its trade creditors to reduce its indebtedness by c.£500,000 to approximately £500,000. On 17 May 2016, the Company announced that it had secured short term funding of £200,000 through the issue of convertible unsecured loan notes which could be redeemed by being converted into Shares at the option of the Company. The Company is pleased to be able to announce that it has made further progress in its debt reduction through the arrangements set out below. 

The arrangements agreed with creditors comprise:

· the issue of 69,428,571 Shares ("Creditors' Shares") and cash payments of £28,500 to trade creditors of the Company in settlement of £148,000 of indebtedness;

· a Director accepting, in principle, payments totalling c.£96,000 in Shares ("Director's Shares") for past services, at a price yet to be agreed, but which is intended to be at a significant premium to the pre-announcement share price of 0.0525 pence per Share. As previously announced, the Company also intends to introduce a new employee share scheme ("New Share Scheme") which will issue the Director's' Shares as restricted shares, the restrictions on the Shares imposed as a condition of their award will include continuing employment with the Company for a specified period of time;

· a reduction of £36,000 in trade creditors through a trade creditor agreeing to accept Shares in payment of this sum at the same price as Shares issued to redeem the Company's £200,000 of convertible unsecured loan notes and any accrued interest thereon, the terms of which were announced to the market on 17 May 2016; and

· a reduction in trade creditors of £25,000, through certain creditors agreeing to accept cash payments of £57,000 in settlement of indebtedness with a face value of £82,000

The total number of Creditors' Shares which are to be issued pursuant to the arrangements set out above total 69,428,571 representing approximately 9.4 per cent of the enlarged issued share capital of the Company following their Admission.

The effective equity conversion price of approximately 0.17p per Creditor Share represents a premium of 227 per cent. to the closing share price of 0.0525 pence on 24 May 2016.

Following the issue of Creditors' Shares referred to above, there will be 735,123,442 ordinary shares of 0.01p each in the Company in issue. The figure of 735,123,442 Shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or a change to their interest, in the Company under the Disclosure and Transparency Rules.

The Creditors' Shares and the Directors' Shares will rank pari passu with the Company's existing ordinary shares of 0.01p each. Application will be made for the Creditors' Shares to be admitted to trading on AIM ("Admission").

It is expected that Admission will become effective and dealings in the Creditors' Shares will commence at 8.00 a.m. on 1 June 2016.

The restricted Share awards to the Director will be made in due course and pursuant to applicable rules and regulations, including when the Company is no longer in a close period as defined by the AIM Rules for Companies.

As at 24 May 2016, the Company had cash reserves of approximately £0.16 million (unaudited) and trade creditors of c. £0.23 million (unaudited). The Company continues to make arrangements for collection of its share of revenues from EGPC in relation to its interest in East Ghazalat. Arrangements have been made with creditors representing a significant portion of the remaining trade creditor balances to defer payment until IRG receives revenues from EGPC in relation to its interests in East Ghazalat which the Company expects to be well in excess of those creditors.

There are an increasing number of attractive acquisition opportunities in Egypt which the Company is assessing and with suitable finance could acquire at attractive prices. The Company continues to pursue discussions with a number of sources of debt and/or equity funding to provide additional working capital to allow it to continue as a going concern and to fund future investment and growth.

CEO comment

Commenting on these initiatives to reduce further the Company's debt and improve its liquidity and working capital, Greg Coleman, CEO of Independent Resources said:

"I am pleased to have made further progress in our debt reduction initiatives and to have reached agreements with a number of our creditors which involve the Company issuing Shares in payment of outstanding debt at prices which represent a substantial premium to our prevailing market price. The Company is continuing to explore options to secure sources of finance to support its current operations and to acquire assets which meet its demanding risk adjusted returns. The Company also continues to progress arrangements to enable it to receive payments of accrued and future revenues on its East Ghazalat asset. The Company will update the market as and when it has material new developments to report. "

For more information, please visit www.ir-plc.com or contact: