Issue of Equity

 

TIDMCDS 
 
RNS Number : 9840P 
CDS Oil & Gas Group PLC 
02 April 2009 
 

 
CDS Oil & Gas Group plc ('CDS' or the 'Company') 
Conversion of loans and debts and issue of equity 
CDS is pleased to announce that Feltown Assets Inc. ("Feltown") and Werton 
Finance S.A. ("Werton"), substantial shareholders in the Company, have agreed to 
convert loans and accrued interest of US$2,321,370 (the "Loans"). The conversion 
of the loan will involve Felton and Werton subscribing for a total of 16,009,447 
new ordinary shares of 10p each ("Ordinary Shares") in the capital of the 
Company at a conversion price of 10p per share (the "Conversion Price"). 
Feltown and Werton acquired the Loans on 20 February 2009 together with their 
equity interests in the Company. The acquired Loans comprised of: 
 
a.$2,000,000 as a 3 month bridging loan with interest at 5% per annum; and 
b.$250,000 repayable on 29 June 2009 with interest at 10 % per annum. 
 
In order to effect the conversion of the Loans, the Company will enter into 
subscription agreements with each of Feltown and Werton to terminate the Loans 
and allot Ordinary Shares to each of them. 
In addition, in connection with the Group's (being CDS and its 
subsidiaries) exploration programme, two suppliers of services to the Group, 
Famay Enterprises Corp ("Famay") and Harmattan FZE ("Harmattan"), have agreed to 
convert an aggregate of $794,674 owed to them by the Group by subscribing for 
2,482,759 and 2,997,752 Ordinary Shares respectively, in both cases at the 
Conversion Price. 
The beneficial owners of Feltown and Werton have a beneficial interest in Famay. 
 Famay provides services to the Group on arm's length commercial terms approved 
by the independent directors. 
Whilst the agreed Conversion Price of 10 pence per Ordinary Share is a 
significant premium to the price at which the Company's Ordinary Shares are 
currently trading on the AIM market of the London Stock Exchange plc, the newly 
issued Ordinary Shares will rank pari passu in all respects with existing 
Ordinary Shares. 
The Company is implementing measures to reduce its administrative costs and 
overheads.  On the operational side, whilst the board of CDS continues to see 
significant prospectivity in the Chaco basin, the Company is actively pursuing 
the farm out of its licences or a similar kind of partnership and is in 
preliminary discussions with a short list of counterparties.  This process is 
likely to take several weeks and in the meantime the principal shareholders - 
being Feltown, Werton and Red Law Corporation Inc. - have agreed to continue to 
support the immediate financial needs of the Group. The current funding 
issues have led to a delay to the Company's proposed drilling programme and CDS 
is currently restricted to desktop analysis and development.It is CDS's 
intention that the prospective partner will be fully involved with the 
finalisation of the proposed drilling programme and its submission to the 
relevant Paraguayan authorities. 
Following the issue of the 21,489,958 new Ordinary Shares ("the Conversion 
Shares"), the total issued share capital of the Company will be 123,365,786 
Ordinary Shares. 
Following conversion of the Loans into ordinary shares, Feltown will hold 
43,435,509 Ordinary Shares, being 35.21% of the enlarged share capital, and 
Werton will hold 29,864,080 Ordinary Shares, being 24.21% of the enlarged share 
capital.  Famay will hold 2,482,759 Ordinary Shares, being 2.01% of the enlarged 
share capital. 
As the central management and control of CDS is outside of the UK, the Channel 
Islands and the Isle of Man, the provisions of the UK Takeover Code do not apply 
to the Company. 
As a result of Feltown's and Werton's shareholdings in the Company, the issue of 
the Conversion Shares constitutes a related party transaction in accordance with 
Rule 13 of the AIM Rules for Companies. The independent directors, having 
consulted with the Company's nominated adviser, Hanson Westhouse Limited, 
consider that the terms of the transaction are fair and reasonable insofar as 
the shareholders are concerned. 
Application has been made for 21,489,958 new Ordinary Shares to be admitted to 
trading on the AIM market.  Admission of the new Ordinary Shares is expected to 
occur on 8 April 2009. 
For further information: 
CDS Oil & Gas Group Tel: [phone] 
Patrice Roman, Chief Executive Officer 
Hanson Westhouse Tel: [phone] 
Bill Staple / Richard Baty 
UK Enquiries: 
Hudson Sandler Tel: [phone] 
Jessica Rouleau / Fran Read 
Other Enquiries 
B4 Communication Tel: [phone] 
Claude Baumann / Frédéric Jacquemoud 
About CDS 
CDS is a UK registered company which, through its Paraguayan subsidiary, CDS 
Energy SA, has a 98.1% working interest in three large blocks with substantial 
oil and gas exploration potential. These blocks are located in the prospective 
eastward extension into north-west Paraguay of the productive Bolivian Chaco 
Basin. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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