INFA.L Regulatory News (INFA)

18 December 2015

InfraStrata plc

("InfraStrata" or the "Company")

Proposed placing to raise up to £450,000

InfraStrata (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce a placing to raise up to £450,625 (before expenses) through the issue of up to 36,050,000 new ordinary shares of 1p each ("Placing Shares") at a price of 1.25 pence per Placing Share (the "Placing") in two tranches.  

The Placing was conducted by Allenby Capital Limited ("Allenby Capital") and the Placing Shares have been placed with institutional and other investors, including existing shareholders and the Company's CEO. Of the funds raised, £214,625 is conditional, inter alia, on the approval of shareholders at the Company's annual general meeting on 26 January 2016 ("AGM") of resolutions to provide authority to the Directors to issue and allot further new ordinary shares otherwise than on a non-pre-emptive basis, further details of which are set out below.

The net proceeds of the Placing, which will be approximately £420,000, will be used to support the working capital requirements of the Company as it progresses work to monetise the Islandmagee gas storage project in the first half of 2016. The net amount raised under the Placing is expected by the Directors to provide the short-term working capital required to reach their monetisation goal whilst seeking to minimise dilution to existing shareholders, but the Directors will keep the Company's funding requirements under review as the project progresses.

Commenting on the placing, Andrew Hindle, the CEO of InfraStrata plc said:

"We welcome the support of existing and new institutional and private investors in the placing. The placing proceeds, together with existing funds, are expected to meet the Company's short-term working capital requirements to support the monetisation of the Islandmagee project. The Company will work with its project partner, Mutual Energy Limited, to seek the necessary investment to enable the gas storage project to proceed to full construction. The process will commence in the New Year with the appointment of advisers to assist the Company with a review of the best options, in order to secure the maximum value for InfraStrata shareholders as soon as possible."

Details of the Placing

The Company has entered into a placing agreement in respect of the Placing with Allenby Capital (the "Placing Agreement"), pursuant to which Allenby Capital has conditionally agreed to use its reasonable endeavours, as agent to the Company, to place the Placing Shares at the Placing price of 1.25p per share with certain institutional and other investors.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches. A total of £236,000, representing the issue of 18,880,000 Placing Shares at 1.25p each (the "First Placing Shares"), has been raised within the Company's existing share allotment authorities (the "First Placing").  Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 23 December 2015 ("First Admission"). The issue of the First Placing Shares is conditional only upon First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission.

The balance of the Placing, being £214,625 and representing the issue of 17,170,000 Placing Shares at 1.25p each (the "Second Placing Shares"), is conditional upon, inter alia, the passing of resolutions 5 and 6 (granting the Directors authority to issue and allot new ordinary shares otherwise than on a non-pre-emptive basis) to be put to shareholders of the Company at the annual general meeting of the Company to be held on 26 January 2016 ("AGM") (the "Second Placing"), whereby such authority will be utilised by the Directors to enable completion of the Second Placing. In addition, the Second Placing is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to the admission of the Second Placing Shares to trading on AIM ("Second Admission"). Application will be made for the Second Placing Shares to be admitted to trading on AIM and it is expected that Second Admission will take place on or around 27 January 2016.

The Placing as a whole would, if the necessary resolutions are approved at the AGM, result in the issue of 36,050,000 new Ordinary Shares representing, in aggregate, approximately 19.17 per cent. of the Company's issued ordinary share capital as enlarged by the Placing. The First Placing is not conditional on the Second Placing completing.

The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Company's existing ordinary shares of 1p ("Ordinary Shares"), including the right to all dividends or other distributions declared, made or paid after the date of issue of the Placing Shares.

The Placing is not being underwritten by Allenby Capital. The Placing Agreement contains customary warranties given by the Company with respect to its business and certain matters connected with the Placing. In addition, the Company has given certain indemnities to Allenby Capital in connection with the Placing. Allenby Capital is entitled to terminate the Placing Agreement in specified circumstances including where there has been a material breach of the warranties.

Recommendation

The Directors of InfraStrata consider that the Placing is in the best interests of the Company and its shareholders as a whole in order to provide further working capital. Accordingly, the Directors unanimously recommend that shareholders vote in favour of the Resolutions to be proposed at the AGM, as they intend to do in respect of their aggregate beneficial shareholdings of 9,520,951 ordinary shares of 1p each in the Company, representing approximately 6.26 per cent. of the existing ordinary share capital.

Director Shareholding

Andrew Hindle (Chief Executive Officer) has subscribed for a total of 1,440,000 Placing Shares in the Placing, with his Placing participation being split equally between the First Placing Shares and the Second Placing Shares. Details of Dr Hindle's participation in the Placing and his resulting interest in the Ordinary Shares are as follows:

*Assuming the necessary resolutions are passed at the AGM and the Second Placing completes.

The participation of Dr Hindle in the Placing is deemed to be a related party transaction under the AIM Rules for Companies. The independent directors (being all the directors of the Company except Dr Hindle) consider, having consulted with its nominated adviser, Allenby Capital, that the terms of Dr Hindle's participation in the Placing are fair and reasonable insofar as InfraStrata's shareholders are concerned.

Total Voting Rights

Upon First Admission, following the issue of the First Placing Shares, the Company's issued share capital will consist of 170,871,599 ordinary shares of 1p each, with one voting right each. The Company does not hold any ordinary shares in treasury. Therefore the total number of ordinary shares and voting rights in the Company will be 170,871,599. With effect from First Admission, 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 to their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

For further information please contact:

InfraStrata plc

Andrew Hindle, Chief Executive Officer 020 8332 1200

Stewart McGarrity, Finance Director

Nominated Adviser and Joint Broker - Allenby Capital Limited

Jeremy Porter / Alex Brearley 020 3328 5656

Joint Broker - VSA Capital Limited

Andrew Raca/ Richard Buckle 020 3005 5004

Notes to Editors:

Background on InfraStrata plc

InfraStrata is an independent petroleum exploration and gas storage company focused on Northern Ireland.

Further information is available on the Company's website, www.infrastrata.co.uk.