Columbus Energy Resources PLC Placing, Subscription and Open Offer (0013T)

TIDMCERP

RNS Number : 0013T

Columbus Energy Resources PLC

09 October 2017

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION.

This announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any investment decision in respect of Columbus Energy Resources plc or other evaluation of any securities of Columbus Energy Resources plc or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

9 October 2017

COLUMBUS ENERGY RESOURCES PLC

("Columbus" or the "Company")

Placing, Subscription and Open Offer to raise up to approximately GBP4.10 million

Acceleration of Growth Strategy

Columbus, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, is pleased to announce that it has conditionally raised gross proceeds of GBP3.00 million (the "Placing") from Schroder Investment Management Limited ("Schroders"). In addition, Senior Management have subscribed to raise gross proceeds of GBP0.10 million (the "Subscription") and the Company is proposing to raise gross proceeds of up to approximately GBP1.00 million through an open offer to Qualifying Shareholders (the "Open Offer", together with the Placing and Subscription, the "Fundraise") to enable existing shareholders the opportunity to participate on the same terms.

Highlights:

   --      Fundraise to raise up to approximately GBP4.10 million to accelerate growth strategy: 

o Placing to raise GBP3.00 million (gross), by the issue of 60,000,000 Ordinary Shares at 5.0p per share (the "Placing Price") to Schroders, with shares expected to be admitted to trading on AIM on 12 October 2017.

o Subscription to raise GBP0.10 million (gross), by the issue of 2,000,000 Ordinary Shares to senior management, being Leo Koot, Executive Chairman, Gordon Stein, Chief Financial Officer, Michael Douglas, Non-Executive Director and Stewart Ahmed, Managing Director of Trinidad, at 5.0p per share (the "Subscription Price"), with shares expected to be admitted to trading on AIM on 12 October 2017.

o Open Offer to be made as soon as practicable to all Qualifying Shareholders to raise up to a further approximately GBP1.00 million (gross) by the issue of up to 20,048,306 shares at 5.0p per share, on a 1 for 31 basis.

-- Placing and Subscription Prices represent a premium of approximately 14.4% to the one month Volume Weighted Average Price of an Existing Ordinary Share.

-- Proceeds of the Fundraise to accelerate the Company's growth strategy on its current assets in Trinidad, with a view to further increasing production and cash flow, and to enable the Company to review and target potential new value-adding opportunities.

Leo Koot, Executive Chairman of Columbus, commented:

"Columbus is thrilled to welcome such a reputable institutional investor like Schroders onto our share register, who we hope will be one of many more investors to identify the value being created for the Company's shareholders.

"Since joining the Company five months ago, the new senior management team has worked hard to transform the business and through our initiatives, we are still on track to be cashflow positive by the end of the year. We could have carried on at our current activity levels, however Columbus has a rare opportunity to accelerate its 2018 work programme, pursue value adding M&A opportunities, further grow our production and in turn our cash flow, as a result of the investment by Schroders. The directors and senior management are delighted to demonstrate our confidence in our Company's strategy by investing alongside Schroders.

"We are grateful for the continued support from our existing shareholder base and in line with our previous statements, have included an open offer element to enable our existing shareholders to participate on equal terms, in a financing that we are confident will be value accretive for all of our shareholders and a step change for our Company.

"Columbus is on an exciting journey and has a team 100% aligned with the Company, strategy, asset base and firepower to move at an increased pace."

A link to an interview with Leo Koot on this investment by Schroders and Senior Management is shown below:

https://www.brrmedia.co.uk/broadcasts-embed/59d797c250ca3d72baf44090/event?popup=true

DETAILED INFORMATION

Columbus is pleased to announce a Placing to raise gross proceeds of GBP3.00 million, a Subscription to raise gross proceeds of GBP0.10 million and a proposed Open Offer of up to approximately GBP1.00 million.

The Placing has been undertaken with the Company's first institutional investor, Schroders, since the introduction of the new management team, with the Subscription undertaken by senior management, being Leo Koot, Executive Chairman, Gordon Stein, Chief Financial Officer, Michael Douglas, Non-Executive Director and Stewart Ahmed, Managing Director of Trinidad.

It is the Board's intention that the net proceeds of the Placing and Subscription (being approximately GBP2.92 million, after costs of approximately GBP0.18 million) and any funds raised from the Open Offer, together with existing cash balances and net revenue received will be used to:

-- Progress the development of the high quality, low risk Goudron Field to increase base production levels, and increase our options to accelerate various other production enhancing opportunities;

-- Advance the maturation of exploration prospectivity in the South West Peninsula, including accelerating focussed technical studies leading to drilling planning activities;

-- Make targeted investments in the Company's existing producing assets and exploration portfolio with a view to further increasing production and cash flow;

   --      Invest in the strengthening of the Trinidad based operational team; and 
   --      Review and target potential new value-adding opportunities. 

In addition to advancing the development of the Company's asset base and strategic focus, management had previously stated they would consider a fundraising to facilitate the introduction of an institutional/strategic investor. The Board is delighted that Schroders has made such a significant investment in the Company.

The Directors have given consideration as to the best way to structure the proposed fundraising, taking into account current market conditions, the composition of the Company's shareholder register and the Board's desire to give shareholders the opportunity to limit dilution as far as practicable.

The Directors have concluded that the structure of the fundraising by way of the Placing, Subscription and Open Offer is the most suitable option available to the Company and its shareholders as a whole. The Open Offer will provide an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares with the option to apply to subscribe for more Open Offer Shares pursuant to an excess application facility (the "Excess Application Facility"). The Placing and Subscription are not conditional upon the Open Offer taking place. Further details of the Open Offer are set out below and will be in the Open Offer Circular, which will be sent to shareholders as soon as practicable.

VSA Capital Limited ("VSA") is acting as Financial Adviser and Broker to the Company in connection with the Fundraise.

The Placing and Subscription

The Company has entered into an agreement with Schroders to issue 60,000,000 new Ordinary Shares at an issue price of 5.0p per Ordinary Share, by way of a Placing and to issue 2,000,000 new Ordinary Shares at an issue price of 5.0p per Ordinary Share to senior management, being Leo Koot, Executive Chairman, Gordon Stein, Chief Financial Officer, Michael Douglas, Non-Executive Director and Stewart Ahmed, Managing Director of Trinidad, by way of a Subscription.

The Placing and Subscription Prices represent a:

-- discount of approximately 16.7% to the to the Company's closing middle market share price of 6.00p on 6 October 2017; and

-- premium of approximately 14.4% to the volume weighted average price of 4.37p for the one month to 6 October 2017.

Application has been made for the Placing and Subscription Shares to be admitted to trading on the AIM market ("AIM") of London Stock Exchange, ("Admission"), and it is expected that Admission will become effective and that dealings will commence in the Placing and Subscription Shares at 8.00 a.m. on 12 October 2017.

The Open Offer

In order to provide Qualifying Shareholders with an opportunity to participate in the fundraising, the Company is proposing to launch a 1 for 31 Open Offer of up to 20,048,306 Open Offer Shares at an issue price of 5.0p per Ordinary share, being the same price as the Placing and Subscription Prices.

The timing and record date for the Open Offer will be notified in due course and will be set out in the Open Offer Circular to all shareholders, which will be sent to Qualifying Shareholders as soon as practicable and will be available on the Company's website www.columbus-erp.com from the date this is issued.

In the event that the Open Offer is not fully subscribed by Qualifying Shareholders, after all Qualifying Shareholders having had the opportunity to apply for an Excess Entitlement over and above their 1-for-31 Basic Entitlement, VSA will have the ability to place any remaining shares with other investors.

The Open Offer Shares, the Placing Shares and the Subscription Shares will, upon issue, rank pari passu with the Company's Existing Ordinary Shares.

Following the issue of the Placing and Subscription Shares the enlarged ordinary share capital of the Company will be 621,497,502 Ordinary Shares. Following the issue of the Open Offer Shares (assuming full take-up under the Open Offer), the enlarged ordinary share capital of the Company will be 641,545,808 Ordinary Shares.

Following the Placing and Subscription, Schroders will be interested in 60,000,000 Ordinary Shares, representing approximately 9.65% of the Company's issued share capital as enlarged by the Placing and Subscription. The Directors and Stewart Ahmed, Managing Director of Trinidad, will be interested in the following Ordinary Shares:

 
             At the date of this 
              Announcement                 On Admission 
            ----------------------------  -------------  ------------- 
                                                 Number 
                   Number     Percentage         of New 
              of Existing    of existing       Ordinary                      Percentage 
                 Ordinary         issued         Shares         Number        of issued 
                   Shares          share     Subscribed    of Ordinary    share capital 
                        *        capital            for         Shares               ** 
 
 Leo Koot       2,823,427          0.50%        700,000      3,523,427            0.57% 
 Gordon 
  Stein         1,377,337          0.25%        500,000      1,877,337            0.30% 
 Michael 
  Douglas       1,172,917          0.21%        300,000      1,472,917            0.24% 
 Stewart 
  Ahmed         1,345,280          0.24%        500,000      1,845,280            0.30% 
 Total          6,718,960          1.20%      2,000,000      8,718,960            1.40% 
 
 

* As previously announced, Leo Koot and Gordon Stein have agreed to receive half of their fees for the first twelve months of their service contracts in the form of shares in the Company. Stewart Ahmed has also agreed to receive half of his fees for the first twelve months of his service contract in the form of shares. The number of existing ordinary shares includes the number of shares the Directors and Stewart Ahmed have accrued and are entitled to as at 8 October 2017.

** as enlarged by the Placing and Subscription.

Market Abuse Regulation

The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market Soundings, as defined in MAR, were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a Market Sounding are no longer in possession of inside information relating to the Company and its securities.

Contact Information

 
 Columbus Energy Resources plc          [phone] 
  Leo Koot / Gordon Stein                9230 
 VSA Capital Limited 
  Financial Adviser and Broker 
  Andrew Monk / Andrew Raca / Justin    [phone] 
  McKeegan                               5000 
 Beaumont Cornish Limited 
  Nominated Adviser 
  Roland Cornish / Rosalind Hill        [phone] 
  Abrahams                               3396 
 Camarco 
  Public and Investor Relations         [phone] 
  Georgia Edwards / James Crothers       4983 
 

The notification below, made in accordance with the requirements of the EU Market Abuse Regulation, provides further detail in respect of the PDMRs subscribing for shares as described above.

Leo Koot

 
 1    Details of the person discharging managerial 
       responsibilities / person closely associated 
---  ------------------------------------------------------------- 
 a)   Name                      Leo Koot 
---  ------------------------  ----------------------------------- 
 2    Reason for notification 
---  ------------------------------------------------------------- 
 a)   Position / status         Executive Chairman 
---  ------------------------  ----------------------------------- 
 b)   Initial notification      Initial 
       /Amendment 
---  ------------------------  ----------------------------------- 
 3    Details of the issuer, emission allowance 
       market participant, auction platform, auctioneer 
       or auction monitor 
---  ------------------------------------------------------------- 
 a)   Name                      Columbus Energy Resources 
                                 plc 
---  ------------------------  ----------------------------------- 
 b)   LEI                       213800WBO186NNYERMZ91 
---  ------------------------  ----------------------------------- 
 4    Details of the transaction(s): section 
       to be repeated for (i) each type of instrument; 
       (ii) each type of transaction; (iii) each 
       date; and (iv) each place where transactions 
       have been conducted 
---  ------------------------------------------------------------- 
 a)   Description of            Ordinary shares of 0.05 pence 
       the financial             each in Columbus Energy Resources 
       instrument, type          plc 
       of instrument 
 
       Identification            ISIN GB00BDGJ2R22 
       code 
---  ------------------------  ----------------------------------- 
      Nature of the             Subscription for new ordinary 
       transaction               shares as described above 
---  ------------------------  ----------------------------------- 
 c)   Price(s) and                Price(s)      Volumes(s) 
       volumes(s)                 ------------  ----------- 
                                   5.00 pence    700,000 
                                  ------------  ----------- 
---  ------------------------  ----------------------------------- 
 d)   Aggregated information    n/a 
---  ------------------------  ----------------------------------- 
 e)   Date of the transaction   9 October 2017 
---  ------------------------  ----------------------------------- 
 f)   Place of the              London Stock Exchange, AIM 
       transaction               (XLON) 
---  ------------------------  ----------------------------------- 
 

Gordon Stein

 
 1    Details of the person discharging managerial 
       responsibilities / person closely associated 
---  ------------------------------------------------------------- 
 a)   Name                      Gordon Stein 
---  ------------------------  ----------------------------------- 
 2    Reason for notification 
---  ------------------------------------------------------------- 
 a)   Position / status         Chief Financial Officer 
---  ------------------------  ----------------------------------- 
 b)   Initial notification      Initial 
       /Amendment 
---  ------------------------  ----------------------------------- 
 3    Details of the issuer, emission allowance 
       market participant, auction platform, auctioneer 
       or auction monitor 
---  ------------------------------------------------------------- 
 a)   Name                      Columbus Energy Resources 
                                 plc 
---  ------------------------  ----------------------------------- 
 b)   LEI                       213800WBO186NNYERMZ91 
---  ------------------------  ----------------------------------- 
 4    Details of the transaction(s): section 
       to be repeated for (i) each type of instrument; 
       (ii) each type of transaction; (iii) each 
       date; and (iv) each place where transactions 
       have been conducted 
---  ------------------------------------------------------------- 
 a)   Description of            Ordinary shares of 0.05 pence 
       the financial             each in Columbus Energy Resources 
       instrument, type          plc 
       of instrument 
 
       Identification            ISIN GB00BDGJ2R22 
       code 
---  ------------------------  ----------------------------------- 
      Nature of the             Subscription for new ordinary 
       transaction               shares as described above 
---  ------------------------  ----------------------------------- 
 c)   Price(s) and                Price(s)      Volumes(s) 
       volumes(s)                 ------------  ----------- 
                                   5.00 pence    500,000 
                                  ------------  ----------- 
---  ------------------------  ----------------------------------- 
 d)   Aggregated information    n/a 
---  ------------------------  ----------------------------------- 
 e)   Date of the transaction   9 October 2017 
---  ------------------------  ----------------------------------- 
 f)   Place of the              London Stock Exchange, AIM 
       transaction               (XLON) 
---  ------------------------  ----------------------------------- 
 

Michael Douglas

 
 1    Details of the person discharging managerial 
       responsibilities / person closely associated 
---  ------------------------------------------------------------- 
 a)   Name                      Michael Douglas 
---  ------------------------  ----------------------------------- 
 2    Reason for notification 
---  ------------------------------------------------------------- 
 a)   Position / status         Non-Executive Director 
---  ------------------------  ----------------------------------- 
 b)   Initial notification      Initial 
       /Amendment 
---  ------------------------  ----------------------------------- 
 3    Details of the issuer, emission allowance 
       market participant, auction platform, auctioneer 
       or auction monitor 
---  ------------------------------------------------------------- 
 a)   Name                      Columbus Energy Resources 
                                 plc 
---  ------------------------  ----------------------------------- 
 b)   LEI                       213800WBO186NNYERMZ91 
---  ------------------------  ----------------------------------- 
 4    Details of the transaction(s): section 

       to be repeated for (i) each type of instrument; 
       (ii) each type of transaction; (iii) each 
       date; and (iv) each place where transactions 
       have been conducted 
---  ------------------------------------------------------------- 
 a)   Description of            Ordinary shares of 0.05 pence 
       the financial             each in Columbus Energy Resources 
       instrument, type          plc 
       of instrument 
 
       Identification            ISIN GB00BDGJ2R22 
       code 
---  ------------------------  ----------------------------------- 
      Nature of the             Subscription for new ordinary 
       transaction               shares as described above 
---  ------------------------  ----------------------------------- 
 c)   Price(s) and                Price(s)      Volumes(s) 
       volumes(s)                 ------------  ----------- 
                                   5.00 pence    300,000 
                                  ------------  ----------- 
---  ------------------------  ----------------------------------- 
 d)   Aggregated information    n/a 
---  ------------------------  ----------------------------------- 
 e)   Date of the transaction   9 October 2017 
---  ------------------------  ----------------------------------- 
 f)   Place of the              London Stock Exchange, AIM 
       transaction               (XLON) 
---  ------------------------  ----------------------------------- 
 

Stewart Ahmed

 
 1    Details of the person discharging managerial 
       responsibilities / person closely associated 
---  ------------------------------------------------------------- 
 a)   Name                      Stewart Ahmed 
---  ------------------------  ----------------------------------- 
 2    Reason for notification 
---  ------------------------------------------------------------- 
 a)   Position / status         Trinidad Managing Director 
---  ------------------------  ----------------------------------- 
 b)   Initial notification      Initial 
       /Amendment 
---  ------------------------  ----------------------------------- 
 3    Details of the issuer, emission allowance 
       market participant, auction platform, auctioneer 
       or auction monitor 
---  ------------------------------------------------------------- 
 a)   Name                      Columbus Energy Resources 
                                 plc 
---  ------------------------  ----------------------------------- 
 b)   LEI                       213800WBO186NNYERMZ91 
---  ------------------------  ----------------------------------- 
 4    Details of the transaction(s): section 
       to be repeated for (i) each type of instrument; 
       (ii) each type of transaction; (iii) each 
       date; and (iv) each place where transactions 
       have been conducted 
---  ------------------------------------------------------------- 
 a)   Description of            Ordinary shares of 0.05 pence 
       the financial             each in Columbus Energy Resources 
       instrument, type          plc 
       of instrument 
 
       Identification            ISIN GB00BDGJ2R22 
       code 
---  ------------------------  ----------------------------------- 
      Nature of the             Subscription for new ordinary 
       transaction               shares as described above 
---  ------------------------  ----------------------------------- 
 c)   Price(s) and                Price(s)      Volumes(s) 
       volumes(s)                 ------------  ----------- 
                                   5.00 pence    500,000 
                                  ------------  ----------- 
---  ------------------------  ----------------------------------- 
 d)   Aggregated information    n/a 
---  ------------------------  ----------------------------------- 
 e)   Date of the transaction   9 October 2017 
---  ------------------------  ----------------------------------- 
 f)   Place of the              London Stock Exchange, AIM 
       transaction               (XLON) 
---  ------------------------  ----------------------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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October 09, 2017 02:00 ET (06:00 GMT)