Tower Resources, the AIM-listed oil and gas company focused on Africa, has agreed an unsecured fixed-price convertible bridge loan of £500,000 with Prime Resources (PR) with a term of up to 12 months, and convertible into ordinary shares at a fixed conversion price of 0.05588 pence per share (being a premium of 100% to the average of the 5 daily VWAPs prior to today's date) if not prepaid earlier. PR is a Gibraltar-registered private investment company and is not related to the Company's prospective farm-in partner Prime Global Energies.
Tower Resources Chairman & CEO, Jeremy Asher, commented:
'The purpose of the Bridge Loan is to provide the Company with working capital flexibility in preparation for the drilling of the NJOM-3 well on the Thali license in the event that completion of the Cameroon and Namibia farm-out agreements, announced on 10 January 2025, takes longer than expected. The Company is confident of receiving the government approvals required to enable completion and is still hoping to do so within the next few weeks. However, based on this confidence, the Company is also keen to ramp up preparations for drilling, including equipment procurement and staffing, in order to minimise the elapsed time between completion and drilling.'
Key Terms of the Bridge Loan
The Company has agreed a fixed-price convertible loan of £500,000 with PR, with a duration of up to 12 months. The material terms of the loan comprise a 5% cash implementation fee payable on drawdown (which is immediate) and interest of 15% per annum or pro rata until repaid, accrued daily and paid on the maturity date. The loan agreement states that as long as the Company's share price (as defined by the average of the 5 latest daily VWAPs) is below the fixed conversion price, then the Company has the right to prepay the loan with accrued interest to the date of repayment and no further fees, with 10 business-days' notice, in which case the conversion right immediately lapses on repayment. However, if the Company's share price is higher than the fixed conversion price, then it will be at the lender's discretion to accept an early cash redemption.
The loan is unsecured, but Tower's operational subsidiaries are parties to standard corporate guarantees and the facility contains standard default provisions.
Importantly, the terms of the Bridge Loan do not include the issue of any warrants or other equity-linked instruments other than the standard fixed-price conversion right if not repaid with interest.
Source: Tower Resources
