Last checked at 14 Mar 2017 07:00
FOR IMMEDIATE RELEASE
Independent Resources plc
("IRG" or the "Company")
Open Offer, Warrant Exercise, Planned Resignation of Director and Total Voting Rights
The Company is pleased to announce that further to the announcement of 6 March 2017 it will shortly be posting to shareholders a circular setting out details of an Open Offer and Notice of General Meeting which will also be available on the Company's website.
The Company would draw attention to the expected timetable of principle events contained within that circular and reproduced below.
1. Introduction
On 6 March 2017 the Company announced the re-shaping of the Board, the introduction of a cornerstone investor in the form of Greenberry plc, an associate of Continental Investment Partners, and the intention to launch an Open Offer and change the Company's name.
In order to allow all Qualifying Shareholders to subscribe for Ordinary Shares on the same terms as the Cornerstone Investor, the Company is making available 2,236,280,127 Open Offer Shares under the Open Offer at the Issue Price.
Qualifying Shareholders may subscribe for Open Offer Shares on the basis of 2 Open Offer Shares for every 3 Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise gross proceeds of approximately £1.45 million for the Company.
The net proceeds of the Open Offer will be used to assist the Company to establish the initial platform from which to grow significantly, in terms of hydrocarbon, human and financial resources.
The Open Offer Shares to be issued pursuant to the Open Offer are to be admitted to trading on AIM at the time of Admission, which is expected to take place on Wednesday 19 April 2017.
The Open Offer is conditional, inter alia, on the passing of the Resolutions 1 & 2 by Shareholders at the General Meeting, notice of which will be set out in the Circular. If the Resolutions are passed, the Open Offer Shares will be allotted immediately after the General Meeting and Admission of the Open Offer Shares is expected to occur at 8.00 a.m. on Wednesday 19 April 2017. Should Shareholder approval not be obtained at the General Meeting the Open Offer will not proceed.
2. Background to and reasons for the Open Offer
On 6 March 2017, IRG announced the re-shaping of the Board, the introduction of a cornerstone institutional investor and the intention to launch an open offer and change the Company's name. The Company also announced its intention for existing shareholders to be offered the chance to participate in an open offer of new shares in the Company. The Open Offer Shares will be priced at 0.065 pence per new share which is the same price as the institutional investment, thereby enabling shareholders to subscribe at an identical price to the Cornerstone Investor.
A notice convening the General Meeting, which is to be held at the offices of Fieldfisher, Riverbank House, 2 Swan Lane, London EC4R 3TT at 11am on 18 April 2017 will be set out in the Circular.
3. Current Trading and Prospects
The Company will shortly publicly unveil its new strategy, alongside a first growth transaction.
IRG and Sound Energy plc have agreed to set out geographical areas for business and expansion to ensure there is no conflict of interest between Sound Energy plc and its officers and IRG. This will include IRG exiting its Italian business and not having any future business in Morocco.
4. Use of Proceeds
The gross proceeds of the Open Offer (assuming full take up under the Open Offer) of up to £1.45 million will assist the Company to establish the initial platform from which the Company will grow significantly, in terms of hydrocarbon, human and financial resources.
5. Details of the Open Offer
5.1 Open Offer Structure
The Directors have given consideration as to the best way to structure the proposed equity fundraising, having regard to current market conditions, the composition of the Company's shareholder register, the level of the Company's share price and the importance of pre-emption rights to Shareholders. After considering these factors, the Directors have concluded that the structure of the fundraising by way of the Open Offer is the most suitable option available to the Company and its Shareholders as a whole.
The Open Offer will provide an opportunity for Qualifying Shareholders to acquire new Ordinary Shares at the same price as the Cornerstone Investor by both acquiring Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares and by subscribing for additional Open Offer Shares pursuant to the Excess Application Facility, subject to availability.
The Issue Price represents a 89.6 per cent. discount to the closing middle market price of 0.6225 pence per Existing Ordinary Share on 13 March 2017, being the last Business Day before the announcement of the Open Offer.
The General Meeting is being called to seek Shareholders' approval to grant new authorities to enable the Directors, inter alia, to complete the Open Offer, thereby raising gross proceeds of up to £1.45 million for the Company. The Open Offer is therefore conditional, inter alia, on the passing of the Resolutions numbered 1 and 2, and Admission, which is expected to take place on 19 April 2017.
The Cornerstone Investor has confirmed to IRG that they will take up their Open Offer Entitlement for such number of shares so as to maintain its shareholding which represents 29.9% of the entire issued share capital of IRG.
5.2 Principal terms of the Open Offer
Qualifying Shareholders will be given the opportunity to subscribe for the Open Offer Shares at a price of 0.065 pence per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:
2 Open Offer Shares for every 3 Existing Ordinary Shares
Qualifying Shareholders will also be given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility. Excess applications will be satisfied only to the extent that corresponding applications are not made by other Qualifying Shareholders or are made for less than their pro rata entitlements.
The allotment and issue of the Open Offer Shares will also need to be made following and conditional on, inter alia, the Shareholder approval referred to above.
Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately £1.45 million for the Company.
All of the Open Offer Shares will, upon issue, rank pari passu with each other and the Existing Ordinary Shares.
Fractions of Open Offer Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.
5.3 Dilution
The Open Offer, if fully subscribed, will result in the issue of 2,236,280,127 Open Offer Shares (representing approximately 40.0 per cent. of the issued share capital of the Company, as enlarged by the Open Offer).
The Open Offer Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and will rank for all dividends or other distributions declared, made or paid after the date of issue of the Open Offer Shares. No temporary documents of title will be issued.
Shareholders who do not elect to participate in the Open Offer will suffer a potential maximum dilution as set out in the table below:
Amount Raised through Open Offer | Number of Open Offer Shares to be issued | Dilution to non-participating Shareholders |
£1.45 million(1) | 2,236,280,127 1) | 40.0% |
(1) Assuming full subscription under the Open Offer
5.4 Excess Application Facility
The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements. Qualifying non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST. Applications for Excess Open Offer Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements. If applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take-up of Open Offer Entitlements, such applications will be scaled back pro rata to the number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility.
Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 16 March 2017. Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 16 March 2017. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.
5.5 Other information relating to the Open Offer
The Open Offer is conditional, inter alia, upon:
(i) the passing of Resolutions 1 and 2; and
(ii) Admission of the Open Offer Shares becoming effective by not later than 8.00 a.m. on 19 April 2017 (or such later time and/or date as the Company may determine, not being later than 8.00 a.m. on 3 May 2017).
Accordingly, if any of such conditions are not satisfied or, if applicable, waived, the relevant part or parts of the Open Offer will not proceed.
Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 19 April 2017 and that dealings for normal settlement in the Open Offer Shares will commence at 8.00 a.m. on 19 April 2017.
6. Change of Name
As announced on 6 March 2017, the Company proposes to change its registered name to Echo Energy plc. A special resolution to adopt the new name will be proposed at the General Meeting. As a result of the change of the Company's name, the Company intends to change its existing ticker symbol from IRG to ECHO as soon as practicable following the General Meeting.
7. General Meeting
A notice convening a General Meeting of the Company, to be held at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT on 18th April 2017 at 11:00 a.m. will be set out in the Circular. At the General Meeting, the following Resolutions will be proposed:
(1) an ordinary resolution to grant authority to the Directors to allot up to 2,236,280,127 Open Offer Shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of £223,628.01. The Directors will limit this authority to the allotment of Open Offer Shares pursuant to the Open Offer;
(2) subject to and conditional on the passing of the resolution referred to in paragraph 1 above, a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 2,236,280,127 Open Offer Shares with an aggregate nominal amount of up to £223,628.01. The Directors will again limit this authority to the allotment of Open Offer Shares pursuant to the Open Offer;
(3) an ordinary resolution to grant a general authority to the Directors to allot up to 2,032,660,000 shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of £203,266. This authority will represent 33.3 per cent. of the Enlarged Share Capital;
(4) a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 609,800,000 equity shares with an aggregate nominal amount of up to £60,980. This authority will represent approximately 10 per cent. of the Enlarged Share Capital; and
(5) a special resolution to change the Company's name to Echo Energy plc
8. Directors' recommendation
The Directors consider the Open Offer to be in the best interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
9. Warrant Exercise
The Company announces that it has received exercise notices from certain of its warrant holders to exercise 507,250,000 warrants into new Ordinary Shares as per the table below:
Exercise price | No. of warrants being exercised |
0.12p | 507,250,000 |
Total: | 507,250,000 |
The total consideration received by the Company pursuant to the warrant exercise will be £608,700.00.
Application will be made for the 507,250,000 new Ordinary Shares, which will rank pari passu with the Existing Ordinary Shares, to be admitted to trading on AIM ("Warrant Exercise Admission"). Warrant Exercise Admission is expected to occur on 20 March 2017.
Following the Warrant Exercise Admission, the total number of voting rights in the Company will be 3,861,670,215 Ordinary Shares. This number may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure and Transparency Rules.
10. Planned Resignation of Director
Further to the announcement on 6 March 2017 the Company announces that Grayson Nash has decided to resign from his position as interim Independent Non-Executive Director. Once again the Company would like to thank Grayson for his contribution over the years and during this interim period.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
James Parsons, Chairman, commented
"We are pleased to invite investors to join us, through this open offer, on the same valuation as our cornerstone investor.
We will shortly publicly unveil our new strategy, alongside our first growth transaction and we see this as a unique opportunity to gain access to a high growth vehicle, led and backed by an experienced and successful team, at the ground floor.
James Parsons Greg Coleman | Echo Energy plc Echo Energy plc | j.parsons@echoenergyplc.com g.coleman@echoenergyplc.com | |
John TreacyJamie Spotswood | ZAI Corporate Finance Ltd.(Nominated Adviser) | 020 7060 2220 | |
Oliver StansfieldJonathan Evans | Brandon Hill Capital(Broker) | 020 3463 5000 |
APPENDIX
DEFINITIONS
The following definitions apply throughout this announcement unless the context otherwise requires:
"Act" | the UK Companies Act 2006 (as amended from time to time) |
"Admission" | the admission to trading on AIM of the Open Offer Shares to be issued pursuant to the Open Offer taking place in accordance with the AIM Rules for Companies |
"AIM" | the market of that name operated by the London Stock Exchange |
"AIM Rules for Companies" | the AIM Rules for Companies, as published and amended from time to time by the London Stock Exchange |
"Application Form" | the application form which accompanies the Circular for Qualifying non-CREST Shareholders for use in connection with the Open Offer |
"Board" | the board of directors of the Company from time to time |
"Business Day" | any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business and the London Stock Exchange is open for trading |
"certificated" or "certificated form" | not in uncertificated form |
"Circular" | the circular to be sent to shareholders expected to be posted on 16 March 2017 |
"Company" or "IRG" or "Independent Resources" | Independent Resources plc, a company incorporated in England and Wales with registered number 5483127 |
"Cornerstone Investor" | Greenberry plc |
"CREST" | the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear UK & Ireland in accordance with the CREST Regulations |
"CREST Regulations" | the Uncertified Securities Regulations 2001, as amended |
"Directors" | the directors of the Company at the date of this announcement |
"East Ghazalat" | the East Ghazalat concession constituted by Law no. 9 of 2007 of the Arab Republic of Egypt which authorised the Concession Agreement for Petroleum Exploration and Exploitation in the East Ghazalat Area of the Western Desert; |
"Enlarged Share Capital" | the issued ordinary share capital of the Company immediately following Admission |
"enabled for settlement" | in relation to Open Offer Entitlements or Excess Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear UK & Ireland) |
"Euroclear UK & Ireland" or "Euroclear" | Euroclear UK & Ireland Limited, the operator of CREST |
"Excess Application Facility" | the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlements |
"Excess CREST Open Offer Entitlement" | in respect of each Qualifying CREST Shareholder, the entitlement to apply for Open Offer Shares in addition to his Open Offer Entitlement credited to that Shareholder's stock account in CREST, pursuant to the Excess Application Facility, which is conditional on the Shareholder taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular |
"Excess Open Offer Entitlement" | an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to that Shareholder's Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on the Shareholder taking up their Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular |
"Excess Shares" | Open Offer Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility |
"Existing Ordinary Shares" | the existing Ordinary Shares in issue |
"FCA" | the Financial Conduct Authority of the United Kingdom |
"Form of Proxy" | the form of proxy relating to the General Meeting being sent to Shareholders with the Circular |
"General Meeting" | the general meeting of the Company convened for 11.00 a.m. on 18 April 2017 (or any adjournment of it), notice of which is set out in the Circular |
"Group" or "IRG Group" | the Company and its subsidiary undertakings |
"Issue Price" | 0.065 pence per Open Offer Share |
"Ksar Hadada Permit" | the permit relating to the exploration for hydrocarbon deposits in the Ksar Hadada area in Tunisia |
"London Stock Exchange" | London Stock Exchange plc |
"Open Offer" | the invitation to Qualifying Shareholders to subscribe for Open Offer Shares at the Issue Price on the terms of and subject to the conditions set out in the Circular and, where relevant, in the Application Form |
"Open Offer Entitlement" | the pro rata basic entitlement for Qualifying Shareholders to apply to subscribe for 2 Open Offer Shares for every 3 Existing Ordinary Shares held by them on the Record Date pursuant to the Open Offer |
"Open Offer Shares" | the 2,236,280,127 Open Offer Shares for which Qualifying Shareholders are being invited to apply under the terms of the Open Offer |
"Ordinary Shares" | ordinary shares of 0.01p each in the capital of the Company |
"Overseas Shareholders" | Shareholders who are resident in, or who are citizens of, or who have registered addresses in, territories other than the United Kingdom |
"Qualifying CREST Shareholders" | Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date are held in uncertificated form |
"Qualifying non-CREST Shareholders" | Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date are held in certificated form |
"Qualifying Shareholders" | holders of Existing Ordinary Shares on the Company's register of members at the Record Date (other than Overseas Shareholders who are located in or citizens of, or have a registered address in certain overseas jurisdictions (including without limitation, any Excluded Territory) and to whom any part of Paragraph [6] of Part [IV] applies so as to exclude their participation in the Open Offer. |
"Record Date" | means the close of business on 13 March 2017 |
"Resolutions" | the resolutions set out in the notice of the General Meeting in the Circular |
"Shareholders" | holders of Existing Ordinary Shares |
"stock account" | an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited |
"subsidiary" | a "subsidiary undertaking" as that term is defined in the Act |
"uncertificated" or "uncertificated form" | recorded on the relevant register or other record of the share or other security concerned as being held in uncertificated form in CREST, and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST |
"United Kingdom" or "UK" | the United Kingdom of Great Britain and Northern Ireland |
"£" or "Pounds" | UK pounds sterling, being the lawful currency of the United Kingdom |
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2017
Record Date for entitlement under the Open Offer ...................................... close of business on 13 March
Announcement of the Open Offer ............................................................................................. 14 March
Posting of the Circular, Form of Proxy and to Qualifying
non-CREST Shareholders only, the Application Form ................................................................ 16 March
Ex-entitlement Date for the Open Offer................................................................ .. 8:00 a.m. on 14 March
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders ................ 8.00 a.m. on 16 March
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST . .............. .. 4.30 p.m. on 7 April
Latest time for depositing Open Offer Entitlements and Excess
CREST Open Offer Entitlements into CREST ........................................................... 3.00 p.m. on 10 April
Latest time and date for splitting Application
Forms (to satisfy bona fide market claims) .............................................................. 3.00 p.m. on 11 April
Latest time and date for receipt of Forms of Proxy ........................................... 11.00 a.m. on 12 April
Expected time and date of announcement of results of the Open Offer ........................ 7.00 a.m. on 13 April
Latest time and date for receipt of completed Application Forms and
payment in full under the Open Offer or settlement of relevant
CREST instruction (as appropriate) ................................................................... 11.00 a.m. on 13 April
General Meeting ................................................................................................. 11.00 a.m. on 18 April
Expected time of announcement of results of the General Meeting....................... ...... 4.30 p.m. on 18 April
Admission effective and dealings in the Open Offer Shares expectedto commence on AIM.............................................................................................. 8.00 a.m. on 19 April
Expected date for crediting of Open Offer Shares in uncertificated form toCREST stock accounts .......................................................................................... 8.00 a.m. on 19 April
Expected date of despatch of share certificates in respect of
Open Offer Shares in certificated form ........................................................................................... 3 May