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23 Dec 2009 07:01
Update on San Leon Approach and Working Capital Loan
Island Oil & Gas plc ("Island" or the "Company")
The Board of Island is pleased to announce that discussions with San Leon Energy plc ("San Leon") relating to the possible acquisition of Island by San Leon are continuing. Both companies are working towards an agreement on an offer for the Company, which the Directors of Island currently intend to recommend.
San Leon has agreed to advance a loan facility to Island of €500,000 ('the Loan'). The purpose of the Loan is to provide working capital to the Company. The Loan consists of two tranches, an initial tranche of €300,000 followed by a second tranche of €200,000 and shall bear interest at 3 per cent. over EURIBOR per annum and is repayable no later than 31 March 2010.
The Loan (including accrued interest) is repayable on 31 January 2010 if San Leon and Island do not make an announcement pursuant to rule 2.5 of the Irish Takeover Rules ("2.5 Announcement") in relation to Island by this date and is also immediately repayable if a 2.5 Announcement is made in relation to Island by any person other than San Leon.
The Loan will be secured by Island granting a charge in favour of San Leon over all of the shares owned by Island in Island (Seven Heads) Limited a wholly owned subsidiary of Island. The main asset of Island (Seven Heads) Limited is a 12.5% interest in the Celtic Sea based Seven Heads gas-producing field.
Enquiries:
Davy Corporate Finance
Anthony Farrell
Phone: +353 1 679 6363
College Hill
Nick Elwes
Phone + 44 (0)207 457 2020
Any person who is a holder of one per cent. or more of any class of shares in Island may be required to make disclosures pursuant to Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2007 and 2008.
The directors of Island accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Company's Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Davy Corporate Finance, which is regulated in Ireland by the Financial Regulator, is acting for Island and no-one else in relation to the approach and will not be responsible to anyone other than Island for providing advice in relation to the approach
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