TIDMZOL
RNS Number : 0485K
Zoltav Resources Inc
29 December 2020
29 December 2020
Zoltav Resources Inc.
("Zoltav" or the "Company")
Corporate Update
&
Holdings in Company
Zoltav (AIM: ZOL), the Russia-focused oil and gas exploration
and production company, provides a corporate update following a
review by the board of directors, in consultation with the
Company's major shareholders, of the strategic options available to
the Company to secure long-term value from the Company's Bortovoy
Licence, its sole producing asset.
Bortovoy Licence Development Strategy
As previously announced, the two currently producing western
fields on the Bortovoy Licence are in natural decline and an
ongoing capital investment programme has been required, and will
continue to be required, in order to sustain production and
commercialise the remaining reserves. The board has determined,
following a technical and economic feasibility study, that
developing the eastern fields, where there remain substantial
undeveloped reserves, by connecting them to the Western Gas Plant
and expanding the plant's capacity, will be necessary in order to
deliver long-term value from the asset.
A final project investment decision for the development of the
eastern fields remains subject to securing committed project
finance. Negotiations with the major Russian banks remain ongoing
however, to date, the Company has been unable to agree binding
terms for such project finance and, as previously announced, any
offer of project finance is likely to provide only a portion of the
required capital investment programme and, as such, will likely
require a significant equity contribution from the Company and/or
its shareholders.
Holdings in Company
The Company has been notified today of a share purchase
agreement ("SPA") pursuant to which ARA Capital Holdings Limited
("ARA Capital Holdings") has agreed to buy, and Bandbear Limited
("Bandbear") has agreed to sell, an interest in the Company of
62,596,644 shares, representing 44.10 percent of Zoltav's total
issued share capital (the "Transaction"). Prior to the completion
of this Transaction, Bandbear will acquire the 6,353,568 shares
that are currently held by Drentru Services LTD, which will
subsequently be acquired by ARA Capital Holdings under the
Transaction.
The SPA provides for the Transaction to take place in two
stages. Initially, ARA Capital Holdings has acquired 8,100,000
Zoltav shares, representing 5.7 percent of Zoltav's total issued
share capital. Accordingly, ARA Capital Holdings has today notified
the Company that, together with its related party ARA Capital
Limited ("ARA Capital"), it holds an interest in 70,696,643 Zoltav
shares, representing 49.80 percent of the Company's total issued
share capital, and Bandbear has today notified the Company that it
now holds an interest in 48,143,076 Zoltav shares, representing
33.9 percent of the Company's total issued share capital.
The acquisition of the remaining shares held by Bandbear is
conditional upon several conditions precedent including ARA Capital
Holdings obtaining clearance from the Russian Federal Antimonopoly
Service ("FAS").
Under the terms of the SPA, the purchase price is denominated in
Russian Roubles and amounts to approximately RUR 1.8 billion
(approximately US$24.3 million) and consists of three instalments
which shall be paid according to the following payment schedule:
the first instalment, which is equal to approximately US$3 million,
has already been paid on entering into the SPA; the balance will be
divided into two equal installments which shall be paid no later
than 31 December 2023 and 31 December 2024 respectively. The
purchase price per share equates to 29 pence per share (see note 1
below).
Loan Agreement Update
Zoltav announced on 14 July 2020 that it had entered into a loan
agreement with ARA Capital Holdings under which ARA Capital
Holdings provided a revolving loan facility for up to US$9,000,000
(the "Loan"). The Loan is currently due for repayment by 31
December 2020 (unless otherwise extended or converted into equity
by mutual agreement). The Company currently has insufficient
amounts of cash or other sources of liquidity or alternative
sources of finance to repay the Loan and, as a result, ARA Capital
Holdings has agreed to extend the final repayment date to 31 March
2021 (The "Loan Extension"). All other terms of the Loan remain
unchanged. The Loan Extension has been granted so as to enable the
Company and ARA Capital Holdings sufficient time to discuss the
options available in respect of the settlement of the Loan which
may include the conversion of the Loan into equity on terms to be
agreed.
ARA Capital Holdings is the parent company of ARA Capital - both
entities combined own 49.80 percent of the issued share capital of
the Company. ARA Capital Holdings and ARA Capital are therefore
regarded as related parties as defined by the AIM Rules for
Companies. The Loan Extension is a related party transaction for
the purposes of Rule 13 of the AIM Rules for Companies. The
directors of Zoltav consider, having consulted with the Company's
nominated adviser, SP Angel Corporate Finance LLP, that the terms
of the related party transaction are fair and reasonable as far as
shareholders are concerned.
Note 1 : Given that the two following instalments are
denominated in Roubles, the purchase price per share is calculated
based on the GBP:RUB exchange rate of The Central Bank of the
Russian Federation as at 2 9 December 2020 which was 100. 02 RUB
per GBP.
Enquiries:
Zoltav Resources Inc. Tel. +44 (0)20 7390
Lea Verny, Non-executive Chairman 0234
(via Vigo Communications)
SP Angel Corporate Finance LLP (Nomad Tel. +44 (0)20 3470
and Joint Broker) 0470
Jeff Keating / Adam Cowl
Vigo Communications Tel. +44 (0)20 7390
Ben Simons / Simon Woods 0234
zoltav@vigocomms.com
About Zoltav
Zoltav is an oil and gas exploration and production company
focused on Russia. The Company holds the Bortovoy Licence in the
Saratov region of South Western Russia, a 3,215 sq km area along
the northern margin of the Pre-Caspian basin, one of the largest
hydrocarbon basins in the CIS. The Bortovoy Licence contains a
number of productive gas fields in the west of the Licence and a
processing plant. The Company is currently evaluating strategies to
commercialise the eastern fields of the Bortovoy Licence. For
further information on Zoltav, or to sign up for our news alert
service, visit: www.zoltav.com.
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END
HOLTLBATMTTTBJM
(END) Dow Jones Newswires
December 29, 2020 10:25 ET (15:25 GMT)
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