TIDMAST
RNS Number : 0468D
Ascent Resources PLC
14 February 2020
Ascent Resources plc
("Ascent" or the "Company")
Board Changes, Fundraising, Debt Restructuring, Share
Consolidation and Subdivision
14 February 2020
Ascent Resources Plc (LON: AST) the onshore European independent
oil and gas exploration and production company, announces a
corporate restructuring, including board changes, a proposed
placing, share consolidation and subdivision and restructuring of
the Company's balance sheet.
The issue of equity is conditional, inter alia, on the approval
by shareholders of resolutions to provide authority to the
Directors to issue and allot adequate new ordinary shares on a
non-pre-emptive basis and a re-organisation of the share capital at
a general meeting to be convened by the Company.
Highlights:
-- James Parsons proposed to join Ascent as Executive Chairman.
-- Louis Castro, Chairman, and Colin Hutchinson, Finance
Director, to step down from the Board at the forthcoming GM.
-- Immediate cancellation of Equity Sharing Agreement with
RiverFort Global Opportunities PCC Limited.
-- Conversion of outstanding US$421,943 loan into a two-year
zero-coupon bullet payment loan convertible at 0.075 pence per
share when share price exceeds 0.1 pence per share for more than 5
days.
-- Share re-organisation, including a consolidation, to take
place to allow new funds to be raised, this will effectively reduce
the number of shares currently in issue by a factor of 100.
-- Gross proceeds of GBP800,000 raised at 5 pence per share post
consolidation (effectively 0.05 pence pre-consolidation).
-- Ewen Ainsworth and Leonardo Salvadori proposed to join Ascent
as Independent Non-Executive Directors.
James Parsons, proposed Executive Chairman, commented: "A s the
oil and gas industry moves deeper into this period of profound
change driven by the energy transition, quality opportunities
present themselves for nimble, well-financed micro-cap
platforms.
Ascent, with its underpinning Slovenian potential, restructured
balance sheet and new team, is an ideal platform for growth
combining access to capital with the very best pre-identified
near-term upstream opportunities and special situations ."
Louis Castro, outgoing Non-Executive Chairman, commented: "I am
pleased that James, as the new Chairman, in addition to new members
of the management team are stepping in to take Ascent forward, with
a strategy focused on developing new areas to focus and grow the
company while continuing to work to realize the value of
Slovenia."
Proposed Board Changes:
Ascent will appoint James Parsons as Executive Chairman
following satisfactory completion of regulatory due diligence.
James has a wealth of corporate and transactional experience on AIM
and a demonstrated ability to access capital to fund junior
resource plays. He is Executive Chairman of Regency Mines plc and
Non-Executive Chairman of Echo Energy plc and Coro Energy plc.
Ascent will also, subject to completion of regulatory due
diligence, appoint Ewen Ainsworth and Leonardo Salvadori as
independent Non-Executive Directors. Ewen Ainsworth is an
experienced AIM company director, who has worked in a variety of
senior and board-level roles in the international natural resource
sector for over 30 years, most recently as Finance Director for San
Leon Energy plc and previously Gulf Keystone Petroleum Limited. He
is currently a non-executive director at Regency Mines plc, CEO of
Discovery Energy Limited, an advisory, consultancy and Investment
Company and Non-Executive Chairman at Nostra Terra Oil and Gas
Company plc. Leonardo Salvadori has over 35 years of operational
and technical oil and gas experience initially with ENI and
Danagas. He is currently the Managing Director for Coro Energy plc
in Italy.
Arrangements with RiverFort Global Opportunities PCC
Limited:
The existing Equity Sharing Agreement announced on 20 September
2019 has been cancelled with immediate effect.
The outstanding US$421,943 loan with Riverfort has been
re-negotiated to a two-year coupon free bullet with conversion
rights for the lender at 0.075 pence per share (150% of the placing
price). No conversion can occur until the share price exceeds 0.1
pence per share (200% of the placing price) for five consecutive
days. The Company has a right to buy out up to 50% of the loan
prior to its expiry at nil premium whilst the share price is below
the conversion price. If the Company does exercise this right, then
the conversion price is adjusted upwards to 0.0875 (175% of the
placing price).
The 43 million warrants initially to be awarded to Riverfort, as
announced on 20 September 2019, will no longer be awarded.
Capital Reorganisation and Share Consolidation
The Company's Ordinary Shares are currently trading at below
nominal value. The Company is not permitted by law to issue shares
at an issue price below their nominal value. Consequently, the
Company proposes a capital reorganisation whereby each existing
ordinary share of 0.2p nominal value is subdivided into one
redenominated ordinary share of 0.005p and a deferred share of
0.195p, and a consolidation of the redenominated shares by a factor
of 100 to 1.
Following the consolidation, the Company will have 30,196,484
Ordinary Shares in issue, each with a nominal value of 0.5 pence.
The Directors consider that it is in the best interests of the
Company's long-term development as a publicly quoted company to
have a smaller number of shares in issue and a higher share price.
Furthermore, a consequence of having a very large number of shares
in issue, with a very low market share price, is that small share
trades can result in large percentage movements in the market share
price which results in considerable share price volatility. The
Board also believes that the bid-offer spread on shares priced at
low absolute levels can be disproportionate to the market share
price, to the detriment of Shareholders.
As set out in the Notice of General Meeting Circular,
shareholders will be asked to consider, and if thought fit, pass
resolutions which will have the following effect: that every 100
ordinary shares of 0.2 pence on the Record Date are consolidated
into one new ordinary share of 0.5 pence each, (the
"Consolidation").
As the expected issued share capital of the Company is not
divisible by 100 without leaving a fraction of a share following
the Reorganisation, it is intended to conditionally issue and
allot, subject to approval of the Reorganisation by shareholders at
the General Meeting, 30,196,484 new Ordinary Shares on the Record
Date. The issued share capital of the Company as at the Record Date
will therefore be 30,196,484 Ordinary Shares.
Fundraising
Ascent has proposed to raise GBP800,000 (GBP720,000 net) by way
of a placing of 16,000,000 new ordinary shares in the Company at a
price of 5 pence per share post consolidation ("the Placing" and
the "Placing Shares"). This is equivalent to 1,600,000,000 shares
at 0.05p pre consolidation.
The issuance of the Placing Shares is conditional upon, inter
alia, the passing of resolutions to be put to shareholders of the
Company at a general meeting of the Company to be held on 5 March
2020 ("the GM") to provide authority to the Directors to issue and
allot the required shares on a non-pre-emptive basis and the
reorganisation of the share capital to address the share price of
the Company being below the nominal value of the ordinary shares. A
circular, containing a notice of the GM, will be posted to
shareholders.
Conditional on the passing of the resolutions at the GM,
application will be made for the Transaction Shares to be admitted
to trading on AIM and it is expected that their admission to AIM
will take place on or around 10 March 2020.
Options Award:
James Parsons and John Buggenhagen have each been awarded
1,385,894 three-year vest, five-year expiry options with an
exercise price of 5 pence per share (post consolidation).
Ewen Ainsworth and Leonardo Salvadori have each been awarded
323,375 three-year vest, five-year expiry options with an exercise
price of 5 pence per share (post consolidation).
Notice of General Meeting:
The Company will publish a Circular to convene the General
Meeting to propose resolutions to enable completion of the
Transaction.
The general meeting will be held on 5 March 2020 at 14:30 at the
offices of Taylor Wessing at 5 New Street Square London EC4A 3TW
United Kingdom.
The circular, containing the notice of general meeting, will be
published and sent to shareholders and will be available shortly
thereafter on the Company's website.
Further information on the proposed directors:
Prior to their formal appointment and following regulatory due
diligence the Company will provide information on each of the
proposed directors as required by Schedule 2g of the AIM Rules for
Companies.
Total Voting Rights:
Following the General Meeting, Admission and Consolidation and
the Placing, the Company's total issued share capital will consist
of 46,196,484 Ordinary Shares of 0.5 pence each. This figure may
then 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 in their interest in, the
share capital of the Company pursuant to the FCA's Disclosure
Guidance and Transparency Rules.
Enquiries:
Ascent Resources plc
Louis Castro, Chairman
John Buggenhagen, CEO 0207 251 4905
WH Ireland, Nominated Adviser & Broker
James Joyce / Chris Savidge 0207 220 1666
SP Angel, Joint Broker
Richard Hail 0203 470 0470
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END
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February 14, 2020 03:41 ET (08:41 GMT)
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