TIDMGPX
RNS Number : 3645I
Gulfsands Petroleum PLC
21 March 2018
This announcement has not been approved by the London Stock
Exchange plc nor is it intended that it will be so approved.
Certain statements included herein constitute "forward-looking
statements" concerning the Company within the meaning of applicable
securities legislation. These forward-looking statements are based
on certain assumptions made by Gulfsands and as such are not a
guarantee of future performance. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such
forward-looking statements. Many of these risks and uncertainties
relate to factors that are beyond Gulfsands' ability to control or
estimate precisely, such as general economic and market conditions
in various countries and regions, political risks, environmental
and physical risks, legislative, fiscal and regulatory
developments, drilling and production results, reserves estimates,
changes in demand for Gulfsands' products, increased costs of
production or price fluctuations in crude oil and natural gas.
Gulfsands cannot give any assurance that such forward-looking
statements will prove to be correct. Gulfsands does not undertake
any obligation to update or revise publicly any forward-looking
statements set out herein, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
This announcement contains inside information for the purpose of
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain. If you have any queries on this, then please contact
Andrew Morris, the Finance Director of the Company (responsible for
arranging release of this announcement) at 5th Floor, 88 Kingsway,
London, WC2B 6AA or on +44 20 7841 2727.
21 March 2018
GULFSANDS PETROLEUM PLC
Secured Financing Facility Extension, Strategic Update and
Intention to Delist
Gulfsands Petroleum plc ("Gulfsands" or the "Company" - AIM:
GPX), the oil and gas company with assets in Syria and Colombia,
today announces that it has finalised a GBP4 million extension to
its existing GBP4 million Secured Term Financing Facility (the
"Facility") from its major shareholders, being ME Investments Ltd,
Waterford Finance & Investment Limited and Blake Holdings
Limited (a company controlled by Mr. Richard Griffiths) (together
the "Major Shareholders" or "Lenders"). As a result of strategic
discussions with the Major Shareholders related to the Facility
extension, the Directors have also concluded that it would
currently be in the best interests of the Company to seek
Shareholder approval to cancel the admission of its Ordinary Shares
from trading on AIM (the "Delisting"), a decision which is
supported by all three Major Shareholders who have each provided
irrevocable undertakings to vote in favour of the Delisting which
amount to approximately 83% of the votes to be cast at the general
meeting to be convened to approve the Delisting.
Secured Term Financing Extension
On 16 February 2017, the Company announced that it had entered
into the Facility. On 17 January 2018, the Company confirmed that
it had completed the draw-down of all remaining tranches of the
Facility. Today the Company announces that it has entered into an
amendment agreement to the Facility, with the Major Shareholders to
extend the maturity of the Facility for 12 months to 23 February
2021 and that the Major Shareholders have committed to provide four
additional tranches of GBP1 million each, to be available on each
of 30 June 2018, 31 December 2018, 30 June 2019 and 31 December
2019 (the "Facility Amendment").
The proportionate participation of the Lenders is unchanged with
the additional tranches provided as follows:
Name of Lender Commitment
Waterford Finance & Investment GBP1,492,000 (37.30%)
Limited GBP1,258,000 (31.45%)
Blake Holdings Limited GBP1,250,000 (31.25%)
ME Investments Limited
TOTAL GBP4,000,000 (100%)
The Company's option to convert the debt on maturity has been
amended to reflect the proposed Delisting and so now makes
reference to the 90-day average closing price prior to 19 March
2018 rather than the 90-day average closing price prior to
repayment.
All other terms are unchanged and are summarised as follows:
-- Interest on loans made (together with accrued fees and
interest) shall run at 7% per annum. A commitment fee of 1% per
annum shall run on any undrawn proportion of the Facility. All fees
and interest accrue quarterly until maturity.
-- All, or part, of the undrawn portion of the Facility may be
cancelled at any time by the Company. The Company may prepay the
whole or any part (of at least GBP800,000) of the outstanding
amounts at any time subject to paying a 10% premium on the amount
pre-paid.
-- The proceeds will be used for general and administrative
expenses of the Group and for working capital purposes and, based
on current forecasts, if fully drawn down, are anticipated to fund
the Company through to the middle of 2020.
-- The Board may resolve to seek equity financing for the Group
in due course should the need arise. If an equity raise takes
place, the Lenders will be entitled to be pre-paid on the terms
noted above, provided the Lenders agree that the full amount to be
pre-paid is used by the Lenders to subscribe for equity in such
equity raise at the issue price.
-- The maturity date of the Facility is now 4 years from the
first drawdown date, being 23 February 2021, at which date all
outstanding amounts will be repayable in cash unless the Company
has exercised an equity conversion right. Pursuant to that right,
the outstanding amounts to be repaid may be converted at the
Company's option into shares of the Company at a price equal to the
lower of: (i) the 90-day average closing price as at 19 March 2018;
and (ii) the lowest price at which the Company has raised equity
capital during the life of the Facility.
-- The Facility is secured: by a mortgage over the shares of the
Company's direct subsidiary, Gulfsands Petroleum Limited; by a
charge over certain intercompany receivables of the Company; by a
charge over certain bank accounts of the Company (should the
Lenders require such a charge to be created); and through the issue
of one ordinary share in the share capital of Gulfsands Petroleum
Limited to the security trustee. The security trustee for the
Facility is Weighbridge Trust. The articles of association of
Gulfsands Petroleum Limited were amended when the Facility was
first put in place to include certain reserved matters requiring
unanimous shareholder consent, pre-emption provisions and
compulsory transfer provisions. In addition to the right to enforce
the security on an insolvency-related event of default, the Lenders
have the right to convert outstanding amounts under the Facility
into a direct equity holding in Gulfsands Petroleum Limited, at a
fair price (from a financial point of view taking into account all
relevant circumstances) to be determined by an expert at the
time.
Entering into this Facility Amendment by the Lenders is
considered a related party transaction pursuant to the AIM Rules.
The independent Directors of Gulfsands for the purposes of this
transaction (being Joe Darby, Richard Milne, John Bell and Andrew
Morris,) consider, having consulted with the Company's Nominated
Adviser, that the terms of the Facility Amendment are fair and
reasonable insofar as the shareholders of Gulfsands are
concerned.
Strategic Update
In conjunction with the agreement to the Facility Amendment, the
Major Shareholders have indicated their support for a progression
of the Company's medium-term strategy.
The Company's long-term strategy remains to be a major oil and
gas producer in the Middle East. The Company is committed to Syria
and continues to view its world class Block 26 asset as core to its
strategy. The Company has a long history and experience in the
Middle East region, in particular in the Levant, and despite the
reported increase in hostilities in recent weeks, the Board remains
cautiously optimistic in the medium-term regarding the improving
environment in the region. Consequently, the Board has decided to
pursue a more progressive medium-term strategy beyond merely
preserving and protecting its existing core assets.
Following the proposed Delisting, the Board will pursue this
progressive strategy which will include: 1) the potential
acquisition of additional oil and gas assets and other business
development initiatives in the region; and 2) working with the
international community, in accordance with all applicable
sanctions, to return to Syria as soon as possible. With the
Facility Amendment in place, the Company's general and
administrative costs are now expected to be funded through to the
middle of 2020. The Company's management is already in the process
of evaluating a number of potential opportunities and the Board is
of the opinion that further opportunities may arise within the
region over the coming period. There can, however, be no guarantee
that any of these opportunities will materialise into meaningful
projects for the Group.
Intention to Delist
In light of this agreed medium-term strategy and the Facility
Amendment, the Major Shareholders requested that the Board consider
the merits and risks of being a listed company versus a delisted
company. Following due consideration, the Board has concluded that
at this time, it is in the best interests of the Company to proceed
as a delisted entity, and therefore has resolved to pursue the
Delisting.
More details of the reasons behind the decision to pursue the
Delisting and the measures that are being put in place to protect
the interests of minority shareholders in the Company after the
Delisting, are outlined in the Circular which includes a letter to
shareholders from the Senior Independent Non-Executive Director.
This letter is appended to this RNS for information.
In summary, the Board considers that the Company no longer reaps
the expected benefits of the listing as it no longer provides the
Company with any significant access to funding from the broader
capital markets, nor does it provide any significant liquidity to
shareholders. This lack of liquidity results in a quoted share
price which the Directors believe is out of line with the
fundamental value of the Company's business. The Company's return
to a growth strategy, and an anticipated sustained period of
increased corporate activity will require significant management
focus. At this time, therefore, the Board believes that the costs
and management burden of retaining the listing on AIM, especially
in the context of a small executive team and limited working
capital, has become disproportionate to the benefits to the
Company.
In respect of the Delisting itself, the Company will be today
posting to Shareholders a circular (the "Circular") including a
notice of a General Meeting to be held at 11a.m. (London time) on
10 April 2018 at the offices of Shakespeare Martineau LLP, 60
Gracechurch Street, London EC3V 0HR, to propose a resolution to
approve the Delisting (the "Resolution"). The preferred date of
cancellation of the admission of the Company's Ordinary Shares to
trading on AIM is 23 April 2018.
Following the proposed Delisting, the Company intends to make
arrangements for a secondary market trading facility, to assist
shareholders to trade in the Ordinary Shares, to be put in place
from the date of Delisting, if the Resolution is passed. The
details of this trading facility will be announced prior to the
date of Delisting.
The Board has received binding undertakings from the Major
Shareholders which will ensure that certain standards of corporate
governance are maintained for a period of at least two years
following the Delisting. In particular, for this period, the Major
Shareholders and the Company have agreed:
1. To ensure that the Company will remain registered as a public
limited company ("PLC") pursuant to the Companies Act 2006 in the
United Kingdom, notwithstanding the Delisting, and will not
re-register as a private limited company;
2. To maintain its website and post periodic updates, although
following the Delisting there will be no obligation on the Company
to include all information required under AIM Rule 26 or the Market
Abuse Regulation ("MAR") or to update the website as required by
the AIM rules or MAR;
3. To ensure that the current balance of the Board and any Board
Committees will be maintained such that there will at all times be
a majority of the Board who are independent of the Executive
Directors and a majority of the Board who are independent of the
Major Shareholders;
4. The Company shall be managed in accordance with such
provisions of the QCA Code as the Board considers practicable and
appropriate for the size, stage of development and operations of
the Group at the relevant time and/or such other UK corporate
governance regime as may be adopted by the Board from time to
time;
5. The approval of directors who are independent of any
conflicted Major Shareholder (the "Independent Directors") shall be
required in terms of any transactions with a Major Shareholder (a
"Related Party Transaction") and approval of any Related Party
Transaction may be subject, at the discretion of the Independent
Directors, to receipt of a written opinion that the terms of such
Related Party Transaction are fair and reasonable in so far as all
shareholders are concerned; and
6. Furthermore, the Independent Directors shall be able to
decide on the inclusion of, and subsequent form of, any pre-emptive
component of an equity fundraising to be undertaken by the Company,
provided that Independent Directors have first confirmed in writing
to the Board that they consider the pre-emptive component to be
reasonable in the circumstances.
The Circular and the Notice of the General Meeting and an
electronic copy of both will also be available on the Company's
website at www.gulfsands.com.
Joe Darby, Senior Independent Director Gulfsands, Petroleum
said:
"In the context of reviewing the future financing of the
Company, and its medium-term strategic objectives, an independent
committee of the Board was established to consider the proposal to
delist the Company's shares from AIM. That committee, which I
chair, has concluded it is in the best interests of the Company and
its shareholders to de-list from AIM, while remaining as an
unlisted public company. The committee concluded that there was
minimal benefit in currently being listed particularly in the
context of access to funding from the boarder capital markets,
given that the only recent material sources of finance have been
the Major Shareholders who have once again shown their commitment
to the Company though the Facility extension.
The committee has ensured that considerable protection for
minority shareholders has been put in place for at least two years.
This includes a secondary market trading facility which we intend
to establish and the fact that the Board will continue to have a
majority of directors who are independent of the Major
Shareholders. As a result of the financing arrangement announced
today, Gulfsands is now funded for an additional two years and can
focus on implementing its stated strategy."
For further information, please refer to the Company's website
at www.gulfsands.com or contact:
Camarco +44 (0)20 3757 4983
Billy Clegg / Owen Roberts
Cantor Fitzgerald Europe +44 (0)20 7894 7000
David Porter / Nick Tulloch
EXTRACT FROM CIRCULAR TO BE POSTED TO SHAREHOLDERS
LETTER FROM THE SENIOR INDEPENT DIRECTOR OF GULFSANDS PETROLEUM
PLC
NOTE THAT DEFINED TERMS IN THIS LETTER WILL BE CONTAINED IN THE
CIRCULAR TO BE POSTED TO SHAREHOLDERS LATER TODAY
LETTER FROM THE SENIOR INDEPENT DIRECTOR OF GULFSANDS PETROLEUM
PLC
Directors
James Ede-Golightly (Non-Executive Chairman)
John Bell (Managing Director)*
Andrew James Morris (Finance Director)*
Joseph Darby (Senior Independent Non-Executive Director)*
Michael Kroupeev (Non-Executive Director)
Richard Milne (Non-Executive Director)*
* Non-Shareholder Director
21 March 2018
To Shareholders and for information purposes only, the holders
of options over Ordinary Shares
Dear Shareholder
Proposal for the cancellation of the admission to trading on AIM
of the Ordinary Shares (the "Delisting")
and
Notice of General Meeting
1. Introduction
The Directors of Gulfsands Petroleum PLC have recently
undertaken a review of the benefits of having its shares continuing
to trade on AIM. Having concluded this review, the Company is
announcing today that it is seeking Shareholder approval to cancel
the admission of its Ordinary Shares from trading on AIM (the
"Delisting"). The Delisting is pursuant to Rule 41 of the AIM
Rules, and requires the approval of not less than 75 per cent of
the votes cast by Shareholders (whether present in person or by
proxy) at the General Meeting.
The GM Notice is set out in Part III of this document.
The purpose of this document is to give you further information
about the background to, and reasons for, the proposed Delisting,
to provide additional information on the implications of the
Delisting and ultimately explain why the Directors believe that it
is the best course of action in the interests of the Company and
Shareholders to vote in favour of the Resolution.
Delisting is conditional upon the approval of the Resolution at
the General Meeting convened for this purpose to be held at 11.00
a.m. (London time) on 10 April 2018 at the offices of Shakespeare
Martineau LLP, 60 Gracechurch Street, London EC3V 0HR.
2. Background to and Reasons for the Proposal
On 17 January 2018, the Company announced that it had drawn down
the remaining GBP1.6 million available under the final two tranches
of the Facility and explained that the Board would then explore its
further funding options for the Company beyond the middle of
2018.
The Board concluded that the only realistic source of such
further funding would be the existing Major Shareholders who have
been the Company's only significant sources of capital for more
than three years. As part of subsequent discussions with the Major
Shareholders, the Company's medium-term strategy was deliberated,
and the Major Shareholders requested that the Company consider
whether the Company would be best served to deliver that
medium-term strategy as an unlisted Plc rather than a listed
company.
Following these discussions, the Company has now secured a
further GBP4 million of funding through an extension of the
Facility. This is anticipated to provide the Company with
sufficient working capital until the middle of 2020 based upon the
existing scope and status of activities within its portfolio.
Details of the terms of the Facility have been announced separately
through the RNS issued by the Company today.
In conjunction with the agreement to extend the Facility, the
Major Shareholders have indicated their support for a progression
of the Company's medium-term strategy whereby the Company will look
beyond simply preserving, protecting and preparing for a return to
Syria when sanctions permit, to include a focus on the potential
acquisition of additional oil and gas assets, and other business
development initiatives, within its area of regional focus, the
Middle East. The Company's management are already in the process of
evaluating a number of potential opportunities and the Board is of
the opinion that further opportunities may arise within the region
over the coming period. There can, however, be no guarantee, that
any of these opportunities will materialise into meaningful
projects for the Group.
In the event that the Company is successful in securing new
business opportunities in accordance with the revised strategy, the
Company may need to raise further finance in addition to the GBP4
million additional funding secured pursuant to the extension of the
Facility. The structure of that additional fundraising would be
considered by the Board at the relevant time.
As requested by the Major Shareholders, in light of this agreed
medium-term strategy, the Board has considered the merits and risks
of being a listed company versus a delisted company. The Board has
concluded that at this time, it is in the best interests of the
Company to proceed as a delisted entity, and therefore has resolved
to seek a cancellation of the admission of its Ordinary Shares to
trading on AIM.
In reaching this conclusion the Board has considered, inter
alia:
-- the impact on the Company's ability to access capital;
-- the additional cost and management burden of retaining the
listing, especially in the event of a sustained period of increased
corporate activity and in the context of a small executive team and
limited working capital;
-- the ability of the Company to successfully implement its
strategy, including its ability to manage the complexity of its
business, to attract and retain staff, advisors and service
providers, and to manage relations with key external stakeholders
including its partners and potential counterparties;
-- the impact of a Delisting on Shareholders and mitigations
that can be put in place as more fully described in paragraph 5.2
of Part I of this document; and
-- the costs and risks associated with the Delisting, including
the potential impact on employees and service providers.
3. Rationale for the Potential Delisting
The Directors have concluded that, given the progressive
medium-term strategy of the Company, the benefits of being listed
on AIM do not justify maintaining the listing and so a resolution
should be put to shareholders to approve a Delisting. The reasons
include the following:
The Company's Ability to Attract Capital
Since the introduction of EU Sanctions in 2011, the Company has
been unable to generate any revenue from its core assets in Syria.
As a result, since then, the Company has been wholly reliant on
first using its own cash resources, and subsequently externally
raised capital, to fund its operations.
In recent years, the listing has not served a useful function
for the Company in terms of providing it with significant access to
funding from the broader capital markets. The only material capital
raised over the last three years, including the recent GBP4 million
extension of the Facility, has been from the three Major
Shareholders who have all indicated their desire for the Company to
Delist. These Major Shareholders now own approximately 83% of the
Company's issued share capital.
This concentrated shareholder base, in turn, results in a
limited free float and liquidity in the Ordinary Shares with the
consequence that the listing does not, in itself, offer investors
the opportunity to trade meaningful volumes with frequency in an
active market.
This limited liquidity creates, at times, high volatility in the
Company's share price, often driven not by fundamental changes to
the Company's business but by speculation, often related to
political developments in the areas in which we operate. This
volatility can result in a share price that is out of line with the
fundamental value of the Company's business, making it an
inaccurate barometer from which to raise significant capital or to
use as currency for acquisitions.
The Financial, Management and Administrative Cost of Maintaining
the Listing
Management has spent a significant amount of effort during the
last two years to reduce the cost of running the business. In doing
so it has increased efficiency and significantly reduced General
& Administrative costs to less than $3 million per year. The
Company's return to a growth strategy, and an anticipated sustained
period of increased corporate activity will require significant
management focus. At this time, therefore, the Board believes that
the costs and management burden of retaining the listing on AIM,
especially in the context of a small executive team and limited
working capital, has become disproportionate to the benefits to the
Company.
As a result, the Directors have concluded that it is appropriate
to complete the Delisting and remove these burdens to allow the
Company to focus on implementing its revised medium-term
strategy
The Board's intention will be to periodically revaluate the
merits of a re-admission of the Company to AIM, or another relevant
stock exchange, as the strategy progresses however there can be no
certainty whether the Company will return to the public
markets.
Following careful consideration, the Directors believe that it
is in the best interests of the Company and Shareholders to seek
the cancellation of the admission of the Company's shares to
trading on AIM.
4. The Potential Delisting
4.1. The effects of the Delisting
If the Delisting becomes effective following the General
Meeting, Shareholders should be aware of the implications and
principal effects of the Delisting, which include the
following:
-- Public market - there will be no public market or trading
facility on any recognised investment exchange for the Ordinary
Shares and, consequently, there can be no guarantee that a
Shareholder will be able to purchase or sell any Ordinary Shares.
Accordingly, while the intention is to implement an off-market
trading facility, as more fully described below in paragraph 5.2.2,
the opportunity for Shareholders to realise their investment in the
Company will be much more limited and there will be no public
valuation of Ordinary Shares held;
-- Liquidity - while the Ordinary Shares will remain freely
transferrable, it is probable that the liquidity and marketability
of the Ordinary Shares may be significantly reduced by the Proposal
for the Delisting and the value of such Ordinary Shares, even
whilst the Company is still admitted to trading on AIM, may be
adversely affected as a consequence;
-- CREST / Certification - while the Company's CREST facility
will remain in place post the Delisting, the Company's CREST
facility may be cancelled in the future, in which case, although
the Ordinary Shares would remain transferable, they would cease to
be transferable through CREST. In this instance, Shareholders who
hold Ordinary Shares in CREST would receive share certificates;
-- AIM Rules - Shareholders will no longer be afforded the
protections given by the AIM Rules, such as the requirement for the
Company to retain a nominated adviser, to be notified of certain
events, including substantial transactions, financing transactions,
related party transactions and fundamental changes in the Company's
business, including certain acquisitions and disposals.
Notwithstanding this, the Company and the Major Shareholders have
agreed to maintain a website for a period of at least 24 months
from the date of delisting which will continue to contain certain
information for Shareholders which the Board considers is prudent
to disclose, although there is no assurance that this will include
all information required under AIM Rule 26 or that it will be
updated as required by the AIM rules;
-- Independent advisers - the Company will cease to have an
independent financial and nominated adviser and broker;
-- Regulatory, accounting and reporting requirements - as an
unlisted company, the Company will be subject to fewer regulatory
restrictions than as a listed company. In addition, as an unlisted
company, the Company may be subject to less stringent accounting
and reporting requirements and will not, for example, be required
to publish interim accounts;
-- Tax - the Delisting may have either positive or negative
taxation consequences for Shareholders. Shareholders who are in any
doubt about their tax position should consult their own
professional independent adviser immediately;
-- Dilution - there will be reduced controls over the terms of
capital raises and issuances of new Ordinary Shares, to related
parties (such as the Major Shareholders) this could lead to
substantial dilution for Minority Shareholders; and
-- MAR - as an unlisted company there will no longer be a
requirement for the Company to publicly disclose matters which
constitute inside information which, as a listed company, it would
be required to do pursuant to the provisions of the Market Abuse
Regulation. Although the Company may in the future publicly
disclose matters which the Directors consider prudent, the
disclosure of information will not reflect the requirements of
MAR.
The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Delisting on them.
4.2. The Delisting Process
Under the AIM Rules, it is a requirement that the Delisting be
approved by not less than 75 per cent of votes cast by Shareholders
at a General Meeting. Accordingly, the GM Notice set out in Part
III of this document contains a special resolution to approve the
Delisting.
Furthermore, Rule 41 of the AIM Rules requires any AIM company
that wishes the London Stock Exchange to cancel the admission of
its shares to trading on AIM to notify shareholders and to
separately inform the London Stock Exchange of its preferred
cancellation date at least 20 Business Days prior to such date. In
accordance with AIM Rule 41, the Directors have notified the London
Stock Exchange of the Company's intention, subject to the
Resolution being passed at the General Meeting, to cancel the
Company's admission of the Ordinary Shares to trading on AIM.
Accordingly, if the Resolution is passed the Delisting will become
effective at 7.00 a.m. on 23 April 2018. If the Delisting becomes
effective, Cantor Fitzgerald Europe will cease to be nominated
adviser of the Company and the Company will no longer be required
to comply with the AIM Rules.
5. The Company After Delisting
5.1. The Medium-Term Strategy and Prospects
The Company's long-term strategy remains to be a major oil and
gas producer in the Middle East. The Company is committed to Syria
and continues to view its world class Block 26 asset as core to its
strategy. The Company has a long history and experience in the
Middle East region, in particular the Levant, and despite the
reported increase in hostilities in recent weeks, the Board remains
cautiously optimistic in the medium-term regarding the improving
environment in the region. Consequently, the Board has decided to
pursue a more progressive medium-term strategy beyond merely
preserving and protecting its existing core assets.
Post Delisting, the Board will pursue this progressive strategy,
which will include the potential acquisition of additional oil and
gas assets, and other business development initiatives in the
region, while also working with the international community, in
accordance with all applicable sanctions, to return to Syria as
soon as is allowed. With the expanded Facility in place, the
Company's General & Administrative costs are now expected to be
funded through to the middle of 2020. While the Company pursues
this more progressive strategy, there can be no guarantee that any
of these initiatives will materialise into meaningful new projects
for the Group.
The Board and the Company remain committed to complying with EU
Sanctions in all its business dealings. Nothing relating to the
Delisting will affect this commitment.
The Company will also continue to manage down its non-core
assets including its exits from Tunisia and Morocco and continues
to seek the farm-out or divestment of its assets in Colombia.
5.2. Minority Shareholder protections after Delisting
Notwithstanding the effects of Delisting outlined in Section
4.1, certain facilities, services and governance arrangements for
Shareholders that currently apply while the Company is AIM listed
will remain in place. Some of these arise pursuant to statute and
others pursuant to policies that have been agreed by the Board,
with the support and agreement of the Major Shareholders.
Shareholders should note that the City Code will continue to
apply to the Company for a period of 10 years from the date of
Delisting. Together with the Companies Act, the City Code will
continue to provide certain protections to Minority Shareholders
and in particular with regard to compulsory acquisitions of Shares
in the context of offers from Major Shareholders or third party
offerors.
The Company will also continue to be bound by the Articles of
Association after the Delisting. The Company currently has no
intention to amend the Articles of Association as result of the
Delisting.
5.2.1 Delisting Undertakings from the Company and Major
Shareholders
The Company has received certain undertakings from each of the
Major Shareholders which are designed to protect the interests of
Minority Shareholders (the "Minority Protections") and these
undertakings also cover the irrevocable undertaking to vote in
favour of the Resolution at the GM. The Company considers that
these Minority Protections provide important mitigation for the
Shareholders in terms of the risks arising in connection with the
Delisting as set out in paragraph 4.1 of Part I of this document.
These Minority Protections are summarised as follows and will
subsist, unless amendments are approved by a majority of the
holders of the Ordinary Shares excluding the Major Shareholders,
for a period of at least two (2) years from the date of
Delisting:
-- The Company as a Public Limited Company
The Company will remain registered as a public limited company
("PLC") pursuant to the Companies Act in the United Kingdom,
notwithstanding the Delisting, and will not re-register as a
private limited company.
-- Information Rights
The Company will:
-- communicate information about the Company (including annual
accounts) to its Shareholders, as required by the Companies
Act;
-- hold Annual General Meetings, in the UK; and
-- maintain its website and post periodic updates, although
Shareholders should be aware that there will be no obligation on
the Company to include all information required under the Market
Abuse Regulation ("MAR") or AIM Rule 26 or to update the website as
required by the AIM rules or MAR. Prior to providing any updates to
the Shareholders, the Board will consider whether it is commercial
and appropriate to do so and whether such disclosure is in the best
interests of the Company and will only publish updates if these
criteria are satisfied.
-- Corporate Governance
-- The current balance of the Board and any Board Committees
will be maintained such that there will at all times be a majority
of the Board who are independent of the Executive Directors and a
majority of the Board who are independent of the Major
Shareholders;
-- The Company shall be managed in accordance with such
provisions of the QCA Code as the Board considers practicable and
appropriate for the size, stage of development and operations of
the Group at the relevant time and/or such other UK corporate
governance regime as may be adopted by the Board from time to
time;
-- The approval of Independent Directors shall be required in
respect of terms of any transactions with a Major Shareholder (a
"Related Party Transaction") and approval of any Related Party
Transaction may be subject, at the discretion of the Independent
Directors, to receipt of an written opinion that the terms of such
Related Party Transaction are fair and reasonable in so far as all
Shareholders are concerned; and
-- Furthermore, the Independent Directors shall be able to
decide on the inclusion of and subsequent form of any pre-emptive
component of an equity fundraising to be undertaken by the Company,
provided that Independent Directors have first confirmed in writing
to the Board that they consider the pre-emptive component to be
reasonable in the circumstances.
5.2.2. Liquidity and Trading of Ordinary Shares Following Delisting
In addition to the Minority Protections outlined above, the
Board is also aware that the proposed Delisting, if approved at the
General Meeting, would make it more difficult for Shareholders to
buy and sell Ordinary Shares should they wish to do so.
Therefore, the Company intends to make arrangements for a
secondary market trading facility, to facilitate Shareholders to
trade in the Ordinary Shares, to be put in place from the date of
Delisting if the Resolution is passed. The details of this trading
facility will be announced prior to the date of Delisting.
6. Irrevocable Undertakings for the General Meeting
The Company has received irrevocable undertakings from the Major
Shareholders to vote, or procure a vote, in favour of the
Resolution in respect of all Ordinary Shares held by each of them
(or in which they are currently interested) on the date of the
General Meeting. They have further committed that they will not
sell any Ordinary Shares between the date of this document and the
date of the General Meeting. As at 19 March 2018 (being the last
practicable date before publication of this document) the Major
Shareholders collectively held 430,323,215 Ordinary shares in
aggregate, representing approximately 83 per cent of the issued
share capital of the Company.
7. Current Trading
The Company released its interim results for the six months
ended 30 June 2017 on 28 September 2017 and has since provided
numerous RNS announcements including ones relating to the reset of
its Putumayo Licence, initiation of the Morocco country exit and
the draw down on the remaining tranches under the existing
Facility. Further operational and financing updates are being
published via RNS today.
8. Taxation
Shareholders are strongly advised to consult their professional
advisers about their own personal tax position arising in
connection with the Delisting.
9. Expected Timetable of Events
The timetable of the events relating to the Delisting is set out
on page 4 of this document. Details regarding the time, date and
location of the General Meeting in particular are set out in
paragraph 10 of this Part I.
10. General Meeting
The General Meeting will be held at 11.00 a.m. (London time) on
10 April 2018 at the offices of Shakespeare Martineau LLP, 60
Gracechurch Street, London EC3V 0HR. at which the Resolution will
be proposed. Please note that the summary and explanation set out
below is not the full text of the Resolution and Shareholders
should review the full text of the Resolution before returning
their Forms of Proxy.
A summary of the Resolution which will be proposed at the
General Meeting, is as follows:
Resolution 1, which will be proposed as a special resolution,
seeks approval for the Delisting.
11. Action to be taken
You will find enclosed with this document a Form of Proxy for
use at the General Meeting or any adjournment thereof. Whether or
not you propose to attend the General Meeting in person, you are
requested to complete and return the Form of Proxy to the Company's
registrars Link Asset Services, in accordance with the instructions
printed thereon as soon as possible but, in any event, to be
received no later than 11.00 a.m. on 8 April 2018. Completion and
return of a Form of Proxy will not preclude you from attending and
voting at the General Meeting in person if you so wish.
As an alternative to returning the Form of Proxy, certain
Shareholders can appoint a proxy electronically as follows. If you
hold your Ordinary Shares in uncertificated form (i.e. in CREST)
you may appoint a proxy by completing and transmitting a CREST
Proxy Instruction in accordance with the procedures set out in the
CREST Manual so that it is received by Link Asset Services (under
CREST participant ID RA10) by no later than 11.00 a.m. on 8 April
2018.
Unless the Form of Proxy or CREST Proxy Instruction is received
by the relevant date and time specified above, it will be invalid.
Completion and posting of the Form of Proxy or completing and
transmitting a CREST Proxy Instruction will not preclude you from
attending and voting in person at the General Meeting if you wish
to do so.
12. Recommendation
The Board, including the Non-Shareholder Directors, consider
that the Proposal is in the best interests of the Company and its
Shareholders as a whole and therefore unanimously recommend that
you vote in favour of the Resolution.
Yours faithfully
Joseph Darby
Senior Independent Non-Executive Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDFKKDQKBKBDNB
(END) Dow Jones Newswires
March 21, 2018 03:01 ET (07:01 GMT)
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