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Provision of Loan

15 Nov 2011 07:00

RNS Number : 0995S
Parkmead Group (The) PLC
15 November 2011
 



 

15 November 2011

 

The Parkmead Group plc

("Parkmead", "the Company" or "the Group")

 

 

Provision of Loan, Related Party Transaction

 

 

The Parkmead Group plc is pleased to have announced the acquisition of a stake in the Platypus gas field and the Possum gas prospect (the "Acquisition") earlier today. This Acquisition is an important step in Parkmead's first stage of its development to become a significant new independent oil and gas company.

 

In addition, the Group is now pleased to announce the provision of a loan to Parkmead of £8 million by Tom Cross, Executive Chairman of the Group, and entities affiliated to him (the "Loan"). The Loan will be utilised to satisfy the consideration for the Acquisition and for the ongoing development of the assets acquired, including drilling. It will also be used for funding general working capital and future corporate purposes. The Loan will have a tenor of two years, with an interest rate of 2.5 per cent. above LIBOR and it will be secured by a standard floating charge provided by the Group.

 

As previously announced, since the appointment of a number of high calibre oil and gas industry executives to the Parkmead team, the Group has been actively evaluating opportunities to build a portfolio of oil and gas assets in proven and frontier oil and gas basins. As part of this process, the Parkmead Board has also been assessing the optimum funding structure based on the nature and size of these opportunities. The Group is currently debt free. Given the size of the Acquisition and the requirement to complete it as quickly and efficiently as possible prior to the upcoming appraisal drilling, the "Independent Directors" (being the entire Parkmead Board except for Tom Cross) have concluded that the Loan from Tom Cross and entities affiliated to him is clearly the best option for the Group and for shareholders as a whole. It enables Parkmead to conclude the Acquisition rapidly and also to finance the subsequent exploitation of the assets being acquired, as well as augment the Group's existing working capital facilities.

 

Tom Cross is beneficially interested in 169,761,525 Ordinary Shares, representing 27.85 per cent of the existing share capital of the Company. Tom Cross is therefore considered to be a related party as defined under the AIM Rules. 

 

Accordingly, the provision by Tom Cross and entities affiliated to him of the Loan to the Company is considered to be a related party transaction for the purposes of AIM Rule 13. The Independent Directors, having consulted with Charles Stanley Securities, Parkmead's nominated adviser, consider the terms of the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.

 

Donald MacKay, Chief Financial Officer of Parkmead commented:

 

"Parkmead is delighted to have secured this loan on flexible and competitive terms, which ensures that the Group is more than fully funded for its forward programme of acquisitions and associated drilling activities."

 

For further information please contact:

The Parkmead Group plc 01224 622200

Tom Cross, Executive Chairman

Donald MacKay, Chief Financial Officer

Kathryn Ramsay, Investor Relations

Charles Stanley Securities 020 7149 6000

Nominated Adviser & Broker

Marc Milmo / Carl Holmes

 

College Hill Associates 020 7457 2020

Nick Elwes

 

Notes to Editors:

Parkmead is an independent oil and gas company that is listed on AIM on the London Stock Exchange (symbol: PMG). Parkmead's primary focus is in the oil and gas exploration and production sector, targeting transactions at both an asset and corporate level. The Company is seeking to exploit exploration and production opportunities to build a significant new independent oil and gas company and has recently appointed a proven, core oil and gas team. Parkmead's growth plans will be delivered through the combined knowledge, experience and strong track record of its team members and will draw upon the team's extensive industry and government relationships in the oil and gas sector.

 

Parkmead's capabilities have been significantly enhanced through the acquisition and integration of Aupec Limited ("Aupec"). As a result, going forward the Group plans to actively pursue investment and advisory opportunities throughout the North Sea, and internationally, using the combined capabilities of the enlarged Parkmead Group.

 

Through its wholly owned subsidiary, Aupec, the Group provides petroleum economics, benchmarking and valuation expertise to a wide range of government bodies and international oil and gas companies. Aupec has to date worked with over 100 governments, national oil companies, majors and independents, across the world, as well as a number of multi-national agencies such as the European Commission and the World Bank. Aupec is currently undertaking an important benchmarking project for a group of the world's most eminent super-majors.

 

For further information please refer to Parkmead's website at www.parkmeadgroup.com and Aupec's website at www.aupec.com

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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