Zenith Energy has completed an offering in the United Kingdom with a significant existing institutional shareholder, as well as a selection of high net-worth private investors. Following the UK Financing, the Company has issued 9,000,000 new common shares in the capital of the company to raise gross proceeds of £135,000 (approx. CAD$232,000).
The issue price of the UK Financing is £0.015, representing a premium of 5.26% over the closing mid-market price of Zenith's common shares admitted to trading on the London Stock Exchange on February 13, 2020.
An application will be made for the UK Financing Shares to be listed on the standard segment of the FCA Official List and to be admitted for trading on the London Stock Exchange Main Market for listed securities.
It is expected that Admission will become effective and that unconditional dealings in the UK Financing Shares will commence on or around 8.00 a.m. (BST) on February 19, 2020.
UK Financing Use of Proceeds
The proceeds of the UK Financing will be used to provide additional funding for the development of Zenith's production portfolio, the identification and acquisition of new oil & gas production assets, as well as for general working capital purposes.
Equity Sharing Agreement
Zenith is pleased to announce that it has entered into an equity sharing agreement ('ESA') with a consortium of institutional investors for a total amount of NOK 9,700,000 (approx. £810,000 or US$1,051,000)
- Subscription for 50,000,000 new common shares in the Company (the 'ESA Shares') by the Investors at an issue price of NOK 0.194 per ESA Shareto raise gross proceeds of NOK 9,700,000, representing approx. 9.86% of the Company's enlarged issued share capital (the 'ESA').
- The NOK 9,700,000 gross proceeds of the ESA will be pledged by the Company pursuant to the ESA with the Investors. The ESA, details of which are set out below, entitles the Company to receive back those proceeds on a pro rata monthly basis over a period of 12 months, structured to commence one month following the subscription of the ESA, subject to adjustment upwards or downwards each month depending on the Company's share price at the time.
- The ESA provides the opportunity for the Company to benefit from positive future share price performance.
US$2.5 million Convertible Loan Facility
The Company can confirm that its current total outstanding liability in relation to the US$2.5 Convertible Loan Facility currently stands at US$1.05 million.
Use of ESA Proceeds
The Company plans to use a proportion of ESA proceeds to progressively close its liability in relation to the aforementioned Facility.
Andrea Cattaneo, Chief Executive Officer, commented:
'It is encouraging to see continued support from large, existing UK institutional shareholders as well as renewed investment from our institutional lenders.
We expect the proceeds of the ESA to provide additional funding for our activities into 2021, as well as help us to reduce our convertible debt exposure. The innovative mechanics of the ESA are expected to enable Zenith to potentially benefit significantly from future share price appreciation.
I look forward to making further announcements in the near future concerning our exciting progress.'
Source: Zenith Energy