22 Sep 2010 07:00
TAU CAPITAL PLC
("Tau" or "the Company")
22 September 2010
PRIVATE EQUITY INVESTMENT
RELATED PARTY TRANSACTION
Deal completion
Tau today announces that it has successfully completed a private equity investment in Lucent Petroleum LLP, an Oil & Gas Exploration company registered under the laws of the Republic of Cyprus and a wholly owned subsidiary of Visor Investment Services, a related party of the investment manager of Tau.
Brief transaction terms:
Tau has committed to providing up to $15M financing to Lucent as per the following structure:
·; Initial $4.5M bridge loan, convertible into newly issued shares of Lucent Petroleum LLP, such conversion subject to grant of approvals by the Government of the Republic of Kazakhstan.
·; Follow-on commitment, post grant of approvals and conversion of the bridge loan into newly issued shares, of up to $10.5M provided as a line of equity.
·; This line of equity will be disbursed in two stages contingent on the achievement of certain operational milestones and execution of corresponding increases of capital of Lucent.
Assuming loan conversion and complete deployment of the line of equity, Tau's final interest in Lucent will be equivalent to 6.18% of the shareholder capital. This shareholding implies a pre-money valuation of Lucent's equity of $227.7M.
The proceeds from this investment are solely intended to fund the exploration and development program to be carried out by Lucent in order to bring its oil assets to the next stage of development.
Investment highlights:
Lucent holds an indirect stake of 99% in Lucent Petroleum LLP (Kazakhstan) ("Lucent KZ") which owns the rights to an exploration block (the "Block") located in the pre-Caspian basin in close proximity to major producing oilfields, including Tengiz.
Lucent KZ oil resources have been independently estimated at a total 479 million barrels of oil.
Lucent is fronted by Henrik Busk, CEO and an accomplished geologist with more than 13 years of experience, mainly in Central Asia and Kazakhstan, at top management level positions in the oil exploration and development business.
Henrik leads a team that accumulates a combined experience of drilling and developing +500 wells and +185 years (110 of those in Central Asia) in the oil exploration industry in companies like MaerskOil, OMV, Max Petroleum, Dragon Oil, Caspian Gas Corporation and Mangistaumunaigas.
Lucent recorded in 2009 a loss of $584K as per audited financials.
Post completion of the drilling program the company will be in a position to pursue different development options, including full scale commercial development of the Block and/or acquisition of other oil assets.
Related Party Transaction
As described above, Visor Investment Services is a related party for the purposes of the Transaction. With the exception of Michael Sauer, who is affiliated with Visor Investment Services, the Directors consider, having consulted with Numis, that the terms of the Transaction are fair and reasonable insofar as the Shareholders are concerned.
Chairman's comment
Philip Lambert, Chairman of Tau, stated: The Board of Directors consider the investment in Lucent a significant step forward in the development of the portfolio of Tau and in the best interest of its shareholders.
Lucent provides private equity exposure in the oil exploration and development sector, key in Kazakhstan, via a high quality asset, as verified by Tau's independent advisors in this transaction, and a thoroughly experienced management team with a strong track-record in developing oil fields in the country.
Further information, please contact:
| IOMA Fund & Investment Management Ltd Cynthia Edwards | Tel: +44 (0) 1624 681381 |
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| Numis Securities Limited Nominated Adviser: Nick Westlake/Hugh Jonathan Corporate Broking: Alex Ham | Tel: +44 (0) 20 7260 1000
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