PPC.L Regulatory News (PPC)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

THIS ANNOUNCEMENT AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

 15 November 2016

PRESIDENT ENERGY PLC

("President", "the Company" or "President Energy" and, together with its subsidiaries, the "Group")

RESULTS OF PLACING

President Energy (AIM: PPC), the oil and gas exploration company, is pleased to announce that as part of the proposed US$20.0 million Fundraising announced earlier today, a total of 267,673,118 Placing Shares were successfully placed with institutional and other investors at a price of 6 pence per Placing Share raising approximately US$17.2 million (£13.8 million) before expenses. In addition, it is expected that the issue of the Subscription Shares will raise a further US$2.8 million (£2.3 million).

The proceeds of the Fundraising will be used to fund the Group's initial 10 well workover programme of shut in wells in Argentina in order to increase Group production and will be used to strengthen the Group's balance sheet, provide critical mass and enable the pursuit of additional internal and inorganic growth opportunities.

As noted in the proposed Fundraising announcement made this morning, the IFC, a member of the World Bank, has pre-emption rights to maintain its percentage ownership in the Company and it has confirmed its intention to subscribe for the Subscription Shares and it is anticipated that definitive agreements will be entered into in respect of the Subscription shortly.

The Placing is conditional on, amongst other things, the passing by the requisite majority of the Company's shareholders of resolutions to grant authorities to Directors to allot further shares for cash on a non-pre-emptive basis. A circular to shareholders containing details of the Fundraising and convening the general meeting to consider these resolutions will be posted by the Company as soon as practicable and is expected to be posted on or around 16 November 2016. It is expected that the general meeting will be held on or around 2 December 2016 and that the New Ordinary Shares and Loan Conversion Shares will be issued shortly thereafter, subject to Admission.

The circular to shareholders will contain a unanimous recommendation from the directors of the Company to vote in favour of the Resolutions. PLLG and certain of the Directors who are shareholders in the Company have irrevocably undertaken to vote or procure to vote in favour of the Resolutions in respect of 123,158,539 ordinary shares, in aggregate, representing approximately 23.4 per cent. of the existing issued Ordinary Share capital of the Company.

Subject to the Resolutions at the general meeting, application will be made to the London Stock Exchange for the New Ordinary Shares (together with the Loan Conversion Shares) to be admitted to trading on AIM. It is expected that Admission will become effective on or around 5 December 2016 and that dealings for normal settlement in the New Ordinary Shares and Loan Conversion Shares will commence at 8.00 am on or around 5 December 2016.

The New Ordinary Shares and Loan Conversion Shares, when issued, will represent approximately 81.5 per cent. of the Existing Ordinary Shares and approximately 44.9 per cent. of the Enlarged Share Capital.

The New Ordinary Shares and Loan Conversion Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared following Admission.

Unless otherwise defined, capitalised terms used in this announcement have the same meaning as set out in the Fundraising announcement issued by the Company earlier today.

Directors' participation

PLLG Investments Limited, a company that is beneficially owned by Peter Levine, Chief Executive Officer and Executive Chairman, has subscribed for a total of 21,012,340 Placing Shares in the Placing as further detailed below. These shares are in addition to the Loan Conversion Shares to be issued to PLLG pursuant to the Loan Restructuring.

Under Rule 9 of the UK's City Code on Takeovers and Mergers (the "Code"), where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares already held by that person and an interest in shares held or acquired by persons acting in concert with him or her) carry 30 per cent. or more of the voting rights attaching to a company's shares that are subject to the Code, that person is required to make a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the company. Pursuant to Peter Levine's continued commitment to donate to charitable causes, PLLG has undertaken to gift to an independent charitable trust and/or charities 20,000,000 Ordinary Shares with Peter Levine and PLLG then ceasing to hold any control over or interest in the voting rights attaching to those ordinary shares. The effect of this means that PLLG's holding of the Enlarged Issued Share Capital following the proposed issue of the Loan Conversion Shares, proposed subscription of Placing Shares and the gifting of the relevant Ordinary Shares as aforesaid is expected to represent 29.82 per cent. of the Enlarged Share Capital.

Related Party Transaction

The restructuring of the existing loan arrangements with IYA Global Limited ("IYA"), the entering into of the New Loan Facility, the issue of the Loan Conversion Shares and PLLG's subscription for Placing Shares under the Placing are related party transactions under the AIM Rules. The Directors, excluding Peter Levine (who is not considered to be independent by virtue of his relationship with PLLG and IYA), consider, having also consulted with Peel Hunt in its capacity as the Company's nominated adviser, that the terms of the Loan Restructuring, the New Loan Facility, the issue of the Loan Conversion Shares and PLLG's subscription for Placing Shares under the Placing are fair and reasonable insofar as independent Shareholders are concerned.

Peter Levine, Chairman, commented:

"I am extremely pleased that today's Fundraising has received such strong support from new and existing investors. Subject to approval at the general meeting, the Fundraising and associated debt reduction mark the start of a new and exciting chapter for the Company. The capitalisation of my loan to the Company underlines my belief in the potential of our current assets and our ability to scale up through targeted additions to the portfolio. Through a combination of low-risk, high-netback production increases from the Argentina workover programme and additional bolt-on opportunities, which this Placing provides for, it is my aim to create the leading mid cap E&P Company in South America." 

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IMPORTANT NOTICE

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

This Announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

The content of this Announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (as amended) ("FSMA").

This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America ("United States" or "US"). This Announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

This announcement is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan, the Republic of Ireland or the republic of South Africa or any other jurisdiction in which such publication, release or distribution would be unlawful (a "Prohibited Jurisdiction"). This Announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This Announcement has been issued by and is the sole responsibility of the Company.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no-one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing, or any other matter referred to herein. Its responsibilities as the Company's nominated adviser and joint bookrunner under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire new Ordinary Shares in reliance on any part of this Announcement. No representation or warranty, express or implied, is made by Peel Hunt as to any of the contents of this Announcement.

BMO Capital Markets Limited ("BMO Capital Markets"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no-one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing, or any other matter referred to herein. Its responsibilities as the Company's joint bookrunner are owed to the Company and not to any other person in respect of their decision to acquire new Ordinary Shares in reliance on any part of this Announcement. No representation or warranty, express or implied, is made by BMO Capital Markets as to any of the contents of this Announcement.

In this announcement, references to "pounds sterling", "£", "pence" and "p" are to the lawful currency of the United Kingdom, references to "US dollars", "US$" and "cents" are to the lawful currency of United States of America. Unless otherwise stated, the basis of translation of pounds sterling into US dollars for the purposes of inclusion in this announcement is £1.00/US$1.2453.

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