01 Apr 2019
Placing, Subscription and Proposed Open OfferTHIS ANNOUNCEMENT AND THE INFORMATION IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE OF THE SECURITIES REFERRED TO HEREIN, IN OR INTO ANY JURISDICTION WHERE SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU No. 596/2014). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Independent Oil & Gas PLC
("IOG" or the "Company")
Placing, Subscription and Proposed Open Offer
the restructuring of agreements with London Oil and Gas Limited (in administration)
IOG is pleased to announce that it has conditionally placed 165,795,050 new ordinary shares of £0.01 each in the capital of the Company (the "Ordinary Shares") by way of a placing (the "Placing") at a price of 10 pence per Ordinary Share (the "Issue Price") to raise gross proceeds of approximately £16.6 million.
In addition, IOG is pleased to announce:
- the proposed issue of 2,750,000 new Ordinary Shares by way of a subscription (the "Subscription") at the Issue Price by certain Directors and key executives to raise £0.275 million;
- that it intends to launch an open offer to Shareholders to raise approximately £2 million (the "Open Offer") through the issue of approximately 20,000,000 new Ordinary Shares, also at the Issue Price;
- (the Placing, the Subscription and the Open Offer together, the "Fundraising").
The Fundraising will be conditional upon, inter alia, the approval of Shareholders at a general meeting of the Company (the "General Meeting") that will take place on or around 23 April 2019 and the Admission of the relevant New Ordinary Shares to trading on AIM. The Placing is not conditional upon either the Subscription or the Open Offer.
Concurrent with and inter-conditional on the Placing, the Company is proposing to restructure its existing arrangements with London Oil & Gas Limited (in administration) ("LOG"), through:
- the rescheduling by 12 months of £7.1 million of debt service due to LOG over the course of 2019 pursuant to the LOG Debt;
- the conversion of £1.64 million in interest due from LOG's existing convertible debt into new Ordinary Shares;("Debt Conversion");
- a 12 month maturity extension of the existing warrants to subscribe for 7,500,000 Ordinary Shares at a strike price of 8 pence per Ordinary Share and 5,777,310 Ordinary Shares at a strike price of 11.9 pence per Ordinary Share which were granted by the Company to LOG in 2015 as part of the provision of certain loans to the Company by LOG and which comprise part of the warrants to subscribe for Ordinary Shares granted to LOG as part of the LOG Debt ("LOG 2015 Warrants").
The Company is currently in an offer period under the Takeover Code and, for as long as the Company remains in an offer period, Shareholders will also be required to approve the Fundraising and certain aspects of the restructuring of the LOG arrangements for the purposes of Rule 21.1 of the Takeover Code. The Circular will therefore also include information to satisfy the requirements of Note 1 on Rule 21.1 of the Takeover Code, if appropriate.
- Approximately £16.6 million has been conditionally raised by way of the Placing at a price of 10 pence per Ordinary Share.
- Intention of certain Directors and key executives to subscribe for £0.275 million to be raised by way of the Subscription at a price of 10 pence per Ordinary Share.
- Approximately £2 million to be raised by way of an Open Offer, also at a price of 10 pence per Ordinary Share. The Open Offer will be available to holders of Existing Ordinary Shares on the Company's register of members on 29 March 2019, being the Record Date (other than Overseas Shareholders who are located in or citizens of, or have a registered address in certain overseas jurisdictions (including without limitation, any Excluded Territory).
- The Issue Price of 10 pence per Ordinary Share represents a discount of 29.2 per cent. to the Closing Price of 14.125 pence per Ordinary Share on 4 March 2019, being the day before RockRose Energy PLC announced a possible offer for the Company and a discount of 41.6 per cent. to the Closing Price of 17.125 pence per Ordinary Share on 29 March 2019, being the last practicable date prior to this announcement.
- The primary use of the proceeds pursuant to the Placing will be to allow the Company to drill its appraisal well at Harvey, expected to spud in mid-2019, at a total remaining cost of approximately £9.6 million.
- In addition, approximately £2.5 million of the proceeds of the Placing will be used to fund continued work on a field development plan for the Goddard gas field.
- The remaining proceeds of the Placing and any proceeds of the Open Offer and the Subscription will be used to fund the Company's working capital requirements to the end of 2019 and ongoing project management costs. This will allow it to continue to progress its ongoing farm-out discussions, enabling it to decide in 1H 2019 between industrial or capital markets funding to FID, which will ensure the development of its SNS portfolio.
- In conjunction with the Fundraising, the Company has agreed to restructure its arrangements with LOG which include: (i) the Debt Conversion; (ii) the extension of £7.1 million of 2019 maturities pursuant to its loan agreements with LOG by 12 months; (iii) the extension of the maturity of 13,277,310 warrants held by LOG from 31 December 2019 to 31 December 2020; and (iv) the implementation of a shareholder relationship agreement between IOG and LOG, to regulate their commercial relations on an arms-length basis.
- A circular convening the General Meeting and setting out further details of the Fundraising, the arrangements being entered into with LOG and the terms and conditions of the Open Offer (the "Circular") is expected to be published on the Company's website and posted to Shareholders on or about 3 April 2019.
The New Ordinary Shares, when issued, will be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue.
Capitalised terms used in this announcement shall have the meaning ascribed to them in the Definitions section at the end of this announcement, unless the context otherwise requires.
Andrew Hockey, CEO of IOG commented:
The institutional Placing, Subscription and Open Offer announced today are a vital step in progressing our plans to become a substantial UK gas producer, delivering excellent returns by unlocking the exceptional value in our portfolio. After a challenging period, this funding and associated debt restructuring ensures that the Company is firmly on track to advance into an exciting new phase and execute our strategy on behalf of our long-term shareholders and new institutional investors. We will now have the time and financial strength to deliver on our two key catalysts to value over the coming months.
First, delivering the development funding for our high-return Core Project through the well-progressed farm-out process or via the capital markets. The project's technical readiness has given us an excellent opportunity to engage with well-funded potential partners on attractive terms. We look forward to selecting our preferred party in 1H 2019 in a transaction which we expect substantially to cover our project funding needs, as well as providing important further industrial validation. We have the right team with the right experience to deliver both the development funding and the project itself, which will generate very substantial cashflow.
Second, drilling the high-impact appraisal well at Harvey which could significantly enhance the project's value and returns. Upon shareholder approval we will be fully funded to deliver this major catalyst as soon as possible, as well as the submission of the Field Development Plan for Goddard, which is another key step in strengthening core value.
The Subscription by the Company's Board and executive demonstrates our firm belief that these plans will deliver the best value for shareholders. The Open Offer also rightly gives our existing shareholders the opportunity to participate on the same terms.
For more information please contact:
Independent Oil & Gas PLC - +44 (0) 20 3879 0510
Andrew Hockey (CEO)
James Chance (CFO)
Rupert Newall (Head of Corporate Finance)
finnCap Ltd (Nominated Adviser, Joint Bookrunner and Financial Adviser) - +44 (0) 20 7220 0500
Christopher Raggett, Simon Hicks (Corporate Finance)
Camille Gochez (Corporate Broking)
Peel Hunt LLP (Joint Bookrunner and Financial Adviser) Richard Crichton - +44 (0) 20 7418 8900
GMP First Energy (Joint Bookrunner) - +44 (0) 20 7448 0200
Vigo Communications - +44 (0) 20 7390 0230
This Announcement has been issued by, and is the sole responsibility of, the Company. No prospectus or admission document will be made available in connection with the matters contained in this Announcement.
The Joint Bookrunners, which are authorised and regulated in the United Kingdom by the FCA are each acting for the Company and no one else in relation to the Placing and Admission and they will not be responsible to anyone other than the Company for providing the protections afforded to customers of Joint Bookrunners or for providing advice in relation to any matter contained in this document or any matter or arrangement referred to in it. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners or by any of their affiliates or agents, as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
finnCap Ltd and Peel Hunt ("Financial Advisers") which are authorised and regulated in the United Kingdom by the FCA are also each acting for the Company and no one else in connection with the approach by RockRose Energy PLC's and they will not be responsible to anyone other than the Company for providing the protections afforded to customers of the Financial Advisers or for providing advice in relation to any matter contained in this document or any matter or arrangement referred to in it. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Financial Advisers or by any of their affiliates or agents, as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or any of the Joint Bookrunners that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, any such restrictions.
This Announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Canada, Australia, Japan or the Republic of South Africa or any jurisdiction into which the publication or distribution would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Canada, Australia, Japan or the Republic of South Africa or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
The securities referred to in this Announcement have not been nor will be registered under the United States Securities Act of 1933, as amended ("Securities Act"), and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. No public offering of the securities referred to in this Announcement is being made in the United States, United Kingdom or elsewhere.
Forward Looking Statements
This Announcement contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements"). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements.
The reader is cautioned that such forward-looking statements are not a guarantee of future results or performance and may prove to be incorrect. These forward-looking statements are statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's and/or its subsidiaries' results of operations, financial condition, prospects, growth, strategies, the industry in which the Company and its subsidiaries operate and are based on the opinions and estimates of management at the date the statements are made and should not be unduly relied on. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.
These forward-looking statements speak only as of the date of this Announcement and the Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, except as required by applicable securities laws.
Rule 26.1 disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.independentoilandgas.com by no later than 12 noon (London time) on 2 April 2019. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8.
A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
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