Edenville Energy announces new strategic investor

Highlights

• Proposed strategic investment by Anthony (Tony) Buckingham of £1 million as part of a £2.48 million (before expenses) placing, which includes participation from the company’s substantial shareholders of, in aggregate, an additional £1.05 million.
• Additional assets targeted in line with previous announcements.

Strategic investor

The company is pleased to announce that Buckingham has agreed a £1 million strategic investment in the company through the placing (as defined below), giving him a shareholding of 18.5% of the company’s issued share capital, as enlarged by the placing, which is subject to, inter alia, shareholder approval at a General Meeting to be convened shortly.

Buckingham is well known in the natural resources market, particularly in Africa, having been CEO and major shareholder of Heritage Oil Limited from 2006 until its acquisition by a wholly-owned subsidiary of Qatari investment fund, Al Mirqab Capital SPC, in 2014 for a consideration of US$1.6 billion. His wealth of experience and broad network of relationships is expected to prove highly beneficial as Edenville looks to add additional assets into the company as previously announced.

Proposed £2 475 000 placing

The company has conditionally raised £2 475 000 (before expenses) by way of a placing of 9.9 million new ordinary shares of 1 p each in the company (ordinary shares) at a placing price of 25 p per ordinary share (the placing shares) through Brandon Hill Capital Limited. Application will be made for the Placing Shares to be admitted to trading on AIM (admission), conditional on shareholder approval at the duly convened General Meeting. A notice of General Meeting will be announced and posted to shareholders shortly.

Conditional on completion of the placing, investors in the placing will also receive, for every placing share, one warrant to subscribe for one new ordinary share, each with an exercise price of 25 p per share, exercisable for a period of three years from the date of grant (warrants), resulting in the issue of 9.9 million warrants. If the warrants are exercised in full, this would result in the issue of a further 9.9 million new ordinary shares, raising £2 475 000 for the development of the company’s business, and which would represent in aggregate approximately 29% of the company’s fully diluted share capital.

As mentioned above, Buckingham has agreed to invest £1 million in the placing for 4 million placing shares, which will result in him holding an 18.5% interest in the enlarged issued share capital of the company on admission. In addition, Buckingham, on admission, will hold 4 million warrants pursuant to the placing. Buckingham has agreed that his aggregate interest in the company’s ordinary shares, including those of any persons deemed to be acting in concert with him, shall not exceed 29.99% of the total voting rights as a result of future acquisitions of ordinary shares pursuant to the exercise of the warrants.

In addition, the company benefits from having four large independent shareholders (representing approximately 50% of the ordinary shares currently in issue), being the Brandon Hill Group, the Pitchcroft Group, RAB Capital and John Story, and Edenville is pleased to confirm their ongoing support via participation in the placing for a combined total of £1 050 000.

Proceeds from the placing, coupled with the company’s existing cash resources, will be used to augment working capital and target additional asset acquisitions, leveraging the natural resources and capital markets expertise of its Board, and significant shareholders, which will be materially boosted by the involvement of Buckingham who is set to become the company’s largest shareholder. The company also intends to use the placing proceeds to repay in cash the outstanding amount of US$421 313 owing to Lind Partners LLC under the funding agreement dated 6 November 2018. Under the funding agreement, once notified of the company’s intention to repay the loan, Lind have the right within 10 business days to convert up to 25% of the face value of the loan (US$225 000) into equity at a price per ordinary share being the lesser of (i) £0.40 and (ii) 90% of the average five daily volume weighted average prices per share as selected by Lind in its sole discretion during the 20 trading days prior to notifying the company of its intention to convert. Any such conversion into equity would occur at the same time as repayment of the balance of the loan in cash by Edenville.

The placing is conditional, inter alia, on shareholders approving the allotment of the placing shares and the warrants at a duly convened General Meeting and admission. The requisite notice of General Meeting is expected to be sent to shareholders shortly and a further announcement will be made in this regard.

Brandon Hill has entered into an agreement with Edenville (the placing agreement) under which, subject to the conditions set out therein, Brandon Hill has been instructed by Edenville to use its reasonable endeavours to procure subscribers for the placing shares. The placing agreement includes customary provisions including that the placing agreement can be terminated in certain circumstances.

Proposed board changes

On completion of the placing, the Directors intend to review the composition of the Board, with the appointment of at least one additional non-executive director proposed to be made.

Significant shareholder and director participation

Brandon Hill, including Neal Griffith and Oliver Stansfield (collectively the Brandon Hill Group), who currently hold 1 997 248 ordinary shares, representing 17% of the company’s current issued share capital, have agreed to subscribe for, in aggregate, 1 362 640 placing shares representing a cash subscription of £340 660. Following admission, the Brandon Hill Group’s revised holding of 3 359 888 ordinary shares will represent 15.5% of the company’s issued share capital as enlarged by the placing.

Brandon Hill Capital has been granted warrants over, in aggregate, 495 000 ordinary shares as part of its fee for arranging the placing (the broker warrants). The broker warrants have a 3-year life and an exercise price of 25 p per ordinary share.

Pitchcroft Capital Limited and its executives, namely Alexander Fullard, William Orgee and David Thomas (collectively the Pitchcroft group), who currently hold 1 578 327 ordinary shares, representing 13.4% of the company’s current issued share capital, have agreed to subscribe for, in aggregate, 1 077 160 placing shares representing a cash subscription of £269 290. Following admission, the Pitchcroft group’s revised holding of 2 655 487 ordinary shares will represent 12.3% of the company’s issued share capital as enlarged by the placing.

John Story, who currently holds 1 379 161 ordinary shares, representing 11.7% of the company’s current issued share capital, has agreed to subscribe for 941 236 placing shares representing a cash subscription of £235 309. Following admission, John Story’s revised holding of 2 320 397 ordinary shares will represent 10.7% of the company’s issued share capital as enlarged by the placing.

RAB Capital, who currently hold 1.2 million ordinary shares, representing 10.2% of the company’s current issued share capital, has agreed to subscribe for 818 964 placing shares representing a cash subscription of £204 741. Following admission, RAB Capital’s revised holding of 2 018 964 ordinary shares will represent 9.3% of the company’s issued share capital as enlarged by the placing.

Alistair Muir, Non-executive Director, has agreed to subscribe for 100 000 placing shares representing a cash subscription of £25 000. Following admission, Muir will be interested in 100 000 ordinary shares, representing 0.5% of the company’s issued share capital as enlarged by the placing.

In the event that their respective individual interests equal or exceed 25% of the issued share capital of the company in the future, the Brandon Hill Group, the Pitchcroft Group, John Story and Buckingham have each agreed to enter into a relationship agreement with the company and Strand Hanson Limited (in its capacity as nominated adviser) on customary terms to be negotiated and agreed.

Dr Jeff Malaihollo, Edenville’s current Chairman and Acting CEO, commented: “I am delighted to welcome Tony Buckingham as a new shareholder. His experience and network of relationships are expected to open up additional asset acquisition opportunities. The company announced earlier this year it intends to bring additional assets into the portfolio following the intended handover of operations at Rukwa to its strategic partner ILTL. The Placing, subject to shareholder approval, should, in our view, now provide the catalyst for these exciting developments to take place.

“I look forward to providing further updates as matters progress.”

Read the article online at: https://www.worldcoal.com/mining/05052021/edenville-energy-announces-new-strategic-investor/