Rame Energy PLC Administration process update (9331I)

TIDMRAME

RNS Number : 9331I

Rame Energy PLC

05 September 2016

Rame Energy plc

("Rame" or the "Company")

Administration process update

Further to the announcement made on 5 August 2016, the Joint Administrators, being Andrew Beckingham and Colin Prescott of Leonard Curtis Recovery Limited, have informed the Directors that their formal statement of proposals (the "Statement of Proposals") to creditors has now been made in accordance with the Insolvency Act (the "Act"). To ensure compliance with the Act, the Joint Administrators will be publishing a notice undertaking to provide a copy of the Statement of Proposals free of charge to any member who applies in writing.

Certain information regarding the on-going Administration process is set out in the Statement of Proposals which states that as at 4 August 2016 the Company has unsecured creditors of an estimated GBP4.4 million. It also sets out the process which the Joint Administrators have been conducting since their appointment. With the assistance of the Directors, the Joint Administrators have engaged with existing shareholders and others who had previously expressed an interest in investing in the Group and have also solicited new interest in order to advance discussions and establish firm proposals in relation to seeking new investment in either recapitalising the Group or making a strategic acquisition of subsidiary interests held in Chilean and UK subsidiaries. A number of proposals, varying in nature and quantum, have been received which have been carefully considered with the assistance of the Joint Administrators' duly appointed Legal Advisors.

As at the date of their report, the Joint Administrators have entered into an exclusivity period with a potential purchaser relating to the acquisition of the interests held in relation to Group subsidiaries based in Chile. Detailed information has not yet been released both as a function of contractual confidentiality and also in order to protect price-sensitive information. The Joint Administrators are also continuing to advance discussions and proposals in relation to the remaining UK based interests of the Company. In the meantime, the Joint Administrators continue to liaise with the directors of the Chilean subsidiaries and are assessing the availability of working capital to enable those Companies to continue to operate as going concerns.

Based on information currently available, the Joint Administrators consider that there may be potential for a Company Voluntary Arrangement ("CVA") to be put to creditors of the Company for consideration alongside a possible sale of assets. Should a CVA not prove possible, the Joint Administrators consider that realisations from asset sales (subject to completion of the same which is not certain at this stage) may be sufficient to enable a dividend to be paid to unsecured creditors. In this situation, on completion of the Administration, the Joint Administrators will file a notice with the Registrar of Companies in order that the Administration will cease and the Company will move automatically into Creditors Voluntary Liquidation ("CVL").

The Joint Administrators consider that it is likely that there will be either a) a rescue of the Company or b) a return to the Company's unsecured creditors. The outcome and extent of any return therefore is dependent upon resolution of the on-going sale and funding negotiations and additionally the discharge of the costs associated with the Administration. The Joint Administrators and the Company will make appropriate updates in due course.

The Statement of Proposals also includes draft unaudited financial information relating to the year ended 31 December 2015 which shows revenue of US$7.3m, an operating loss of US$2.8m and a loss after tax of US$3.2m.

On 1 July 2016, the Company's shares were suspended from trading on AIM as the Company was not in a position to publish its audited annual report and accounts ("Annual Report") within the timeframe laid out by the AIM Rules for Companies. That suspension will remain in place until such time as the Company is able to publish its audited Annual Report.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Enquiries:

 
 Leonard Curtis Recovery Limited                               [e-mail] 
  (Administrators) 
  Andrew Beckingham 
  Colin Prescott 
 
 Rame Energy plc (Via the Administrators) 
 Tim Adams 
  Kevin McNair 
 
 Cantor Fitzgerald Europe (Nominated Adviser and Broker)       [phone] 
 Andrew Craig 
  Richard Salmond 
 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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September 05, 2016 03:42 ET (07:42 GMT)