TIDMNUOG
RNS Number : 6648P
Nu-Oil and Gas PLC
11 October 2019
11 October 2019
Nu-Oil and Gas plc
("Nu-Oil" or "the Company")
Posting of Circular and Notice of General Meeting
Further to the Company's announcement on 2 October 2019, the
Company announces that it is today posting to its Shareholders a
circular (the "Circular") and accompanying notice of general
meeting of the Company (the "General Meeting") containing further
details of the proposals set out in that announcement, and as more
fully described below.
The Circular convenes the General Meeting for 10:30 a.m. on 4
November 2019 at 14/15 Belgrave Square, London, SW1X 8PS. A copy of
the Circular and the Form of Proxy will shortly be made available
on the Company's website at
http://nu-oilandgas.com/investors/reports-and-circulars. Depending
on shareholders' mailing preferences the Company will today post a
copy of the Circular or letter, accompanied by a Form of Proxy.
The key sections of the Circular have been extracted verbatim
below. Unless the context requires otherwise, definitions used in
this announcement and the Circular are set out at the end of this
announcement.
Introduction
On 2 October 2019, the Company announced the implementation of a
number of changes to strengthen the Company's financial position
and create the foundation for a new strategic direction. These
changes included, inter alia, the restructuring of the Company's
existing debt which is now owned by C4 Energy, the disposal of the
Company's 50% interest in MFDevCo to RMRI Limited, a proposed
Placing and certain Board changes.
The Proposals are conditional upon Shareholder approval, which
will be sought at the General Meeting to be held on 4 November
2019, notice of which is set out at the end of this letter.
Shareholder approval will also be sought at the General Meeting in
relation to the proposed re-organisation of the Company's share
capital to reduce the nominal value of each Existing Ordinary Share
in order to facilitate, inter alia, the proposed Placing and the
granting of conversion rights under the Loan Notes.
The Directors unanimously recommend that you vote in favour of
all of the Resolutions, which are inter-conditional, to be proposed
at the General Meeting as they intend to do in respect of their
beneficial holdings of Existing Ordinary Shares.
Sale of interest in MFDevCo and issue of Settlement Shares
The Company has agreed to sell its 50% interest in MFDevCo to
RMRI (which holds the remaining 50% interest in MFDevCo) and to
issue 91,666,667 New Ordinary Shares in the Company to RMRI
(Settlement Shares) in consideration for the release of all
outstanding debt due to RMRI and Alan Minty which totals,
approximately GBP1.3million. In the Company's announcement dated 2
October 2019 the number of Settlement Shares was incorrectly stated
to be 88,709,678 due to a rounding error on the price used to
calculate the number of shares.
As the Proposed Sale is considered to be a fundamental disposal
for the purposes of Rule 15 of the AIM Rules, it is subject to
Shareholder approval. Furthermore, the Proposed Sale and the issue
of the Settlement Shares are considered related party transactions
under the AIM Rules as RMRI is controlled by Alan Minty, a former
director of the Company within the last 12 months. It was confirmed
by the independent Directors of the Company (being, at the relevant
time, Graham Scotton, Frank Jackson, Tejvinder Minhas and Michael
Bowman) that, having consulted with Strand Hanson, the terms of the
Proposed Sale and the accompanying issue of the Settlement Shares
are fair and reasonable as far as Shareholders are concerned.
Restructuring of debt
As announced on 2 October 2019, the Company has been informed by
Shard that it has sold the loan owing to Shard by the Company to C4
Energy (the "Debt Sale").
In connection with the Debt Sale, the Company has restructured
the debt owing now to C4 Energy through the creation of the Loan
Notes, which are freely transferable, unsecured, interest free and
with repayment due at the end of the five year term. Subject to
approval of the Shareholders at the General Meeting, the Loan Notes
will also grant C4 Energy the right to convert amounts due under
the Loan Notes into New Ordinary Shares at the Issue Price at any
time during the term of the Loan Notes.
The Loan Notes contain a restriction preventing conversion of
such amount that would result in C4 Energy holding more than 29.9%
of the Company's issued share capital from time to time.
Placing
The Company has conditionally agreed to raise gross proceeds of
GBP0.5 million by way of a placing of 1,000,000,000 New Ordinary
Shares at a price 0.05p per share.
The net proceeds of the proposed Placing will be used for short
term general working capital purposes of the Company.
The admission of the Placing Shares to trading on AIM is
expected to occur on or around 8:00 a.m. on 7 November 2019.
Proposed Share Capital Re-Organisation
Under English law, a company is unable to issue shares at a
subscription price which is less than their nominal value. The
nominal value of the Existing Ordinary Shares is 0.1p, and the
current market price as at close of trading on 10 October 2019
(being the last practicable date prior to the approval of this
document) was 0.09p.
As disclosed above, the proposed Issue Price is below the
nominal value of the Existing Ordinary Shares and therefore the
Proposals could not proceed without the Share Capital
Reorganisation being implemented.
In order to facilitate, inter alia, the proposed Placing and
granting of conversion rights under the Loan Notes, it is proposed
that each of the Existing Ordinary Shares be sub-divided into one
New Ordinary Share with a nominal value of 0.0001p and one 2019
Deferred Share with a nominal value of 0.0999p.
The 2019 Deferred Shares will have no value or voting rights.
They will not be admitted to trading on AIM. The full rights
attaching to the 2019 Deferred Shares are set out in Resolution 1
in the Notice of General Meeting, which, if passed, will amend the
Company's Articles of Association to set out the rights of the 2019
Deferred Shares.
After the Share Capital Reorganisation, there will be the same
number of New Ordinary Shares in issue as there are Existing
Ordinary Shares. The New Ordinary Shares will have the same rights
as those currently accruing to the Existing Ordinary Shares in
issue under the Articles of Association, including those relating
to voting and entitlement to dividends.
You will not be issued with a new share certificate for your New
Ordinary Shares and the existing certificate will remain valid.
Holders of options and warrants over Existing Ordinary Shares will
maintain the same rights as currently accruing to them and will not
be issued with new warrant or option certificates.
A copy of the Company's existing Articles of Association and the
proposed new Articles of Association marked up to show all the
proposed changes will be available for inspection from 25 October
to 1 November 2019 during normal business hours at the office of
the Company and for at least 15 minutes prior to the General
Meeting on 4 November 2019.
Board Changes
As part of the restructuring of the Company, Mr Jay
Bhattacherjee will be appointed as Non-Executive Chairman of the
Company and Mr Andrew Dennan will be appointed as a Non-Executive
Director of the Company.
Graham Scotton has transitioned from his role as Executive
Chairman of the Company to be Non-Executive Chairman of the Company
on an interim basis, pending the appointment of Mr Jay
Bhattacherjee as referred to above, at which point he will move
into the position of Non-Executive Director. Frank Jackson remains
as a Non-Executive Director of the Company.
Each of Damian Minty (Joint Managing Director and Chief
Financial Officer of the Company), Alison Pegram, (Joint Managing
Director of the Company), Professor Michael Bowman and Mr Tejvinder
Minhas (both Non-Executive Directors of the Company) have resigned
from their respective roles and stood down from the Board.
Grant of Options and authority to issue Warrants
The Company intends that each of Mr Jay Bhattacherjee and Mr
Andrew Dennan will each be granted options to subscribe for 90
million New Ordinary Shares at a price of 0.0625 pence per share
(the "Options").
The Company further intends to have the ability, should it so
desire in the future, to grant warrants over up to 120 million New
Ordinary Shares on similar terms and at a similar exercise price to
selected service providers (the "Warrants").
AIM Rule 15 and Future Strategy of the Company
As the Proposed Sale will result in the Company divesting of the
majority of its trading business, activities or assets, the Company
will, following the completion of the Proposed Sale, assuming
Shareholders approve all the Resolutions, be deemed to become an
AIM Rule 15 Cash Shell under the AIM Rules. As such, the Company
will be required to make an acquisition (or acquisitions) which
constitutes a reverse takeover under AIM Rule 14 on or before the
date falling six months from completion of the Proposed Sale, or be
re-admitted to trading on AIM as an investing company under AIM
Rule 8 (which requires the raising of at least GBP6 million in cash
via an equity fundraising on, or immediately before, re-admission).
Failing which, the Company's New Ordinary Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM would be cancelled six months from the date of
suspension should the reason for the suspension not have been
rectified pursuant to AIM Rule 41.
At this time, the reconstituted Board intends to complete an
acquisition which will constitute a reverse takeover within six
months following completion of the Proposed Sale. It is intended
that this proposed acquisition would be within the oil and gas
space, with further Board changes to be made as appropriate
depending on the specifics of the proposed acquisition. The
reconstituted Board intends to evaluate in short order potential
acquisition targets with part of the net proceeds of the Placing
and looks forward to updating the market as and when
appropriate.
Recommendation
The Directors consider the Resolutions to be in the best
interests of the Company and the Shareholders as a whole. The
Directors unanimously recommend Shareholders to vote in favour of
the Resolutions, as they intend to do or procure to be done in
respect of their own beneficial holdings of Existing Ordinary
Shares.
Shareholders should note that, given the inter-conditional
nature of the Resolutions, in the event that all of the Resolutions
are not approved at the General Meeting, the Proposals will not
proceed. In this scenario, the funds from the Placing would not be
received and the Board would need to seek alternative sources of
financing immediately. The Board is not confident that alternative
financing would be available and, in the event that such financing
is not available then the Company will be put into administration.
As such, Shareholders are strongly encouraged to vote in favour of
the Resolutions.
Expected Timetable
Circular posted to Shareholders 11 October 2019
Last time and date of receipt of Forms 10:30 a.m. on 31 October
of Proxy 2019
General Meeting 10:30 a.m. on 4 November
2019
Admission of the New Ordinary Shares, 8:00 a.m. on 7 November
the Placing Shares and Settlement Shares 2019
to trading on AIM
References to the time in this letter and Notice of General Meeting
are to British Summer Time (BST) or Greenwich Mean Time (GMT)
as appropriate.
Key Statistics
Number of Existing Ordinary Shares as
at the date of this document 1,498,726,550
Number of New Ordinary Shares in issue
following the Share Capital Reorganisation 1,498,726,550
Number of 2019 Deferred Shares in issue
following the Share Capital Reorganisation 1,498,726,550
Number of Placing Shares 1,000,000,000
Number of Settlement Shares 91,666,667
Number of New Ordinary Shares following
the Share Capital Reorganisation, the
Placing and the issue of the Settlement
Shares 2,590,393,217
Number of New Ordinary Shares (following
the Share Capital Reorganisation) held
in treasury 12,445,378
Expected number of voting rights in the
Company following the Share Capital Reorganisation,
the Placing and the issue of the Settlement
Shares 2,577,947,839
Options being issued as part of the Proposals 180,000,000
Existing number of options and warrants
in issue as at the date of this document 121,293,696
Definitions
The following definitions apply throughout this document unless
the context otherwise requires:
"Act" the Companies Act 2006;
"AIM" the AIM market of the London Stock Exchange;
"AIM Rules" the rules applicable to companies whose
securities are traded on AIM published
by the London Stock Exchange;
"Articles of Association" the articles of association of the Company;
"C4 Energy" C4 Energy Limited, a UK incorporated
company;
"Company" Nu-Oil and Gas PLC;
"Directors" or "Board" the directors of the Company at the date
of this document;
"Existing Ordinary the 1,498,726,550 Ordinary Shares of
Shares" 0.1p each in issue at the date of this
document;
"FCA" the Financial Conduct Authority of the
United Kingdom;
"Form of Proxy" the form of proxy for use by Shareholders
in connection with the General Meeting;
"FSMA" the Financial Services and Markets Act
2000 (as amended);
"General Meeting" the general meeting of the Company convened
for 10:30 a.m. on 4 November 2019 at
14/15 Belgrave Square, London, SW1X 8PS,
or any reconvened meeting following any
adjournment thereof, notice of which
is set out in the Notice;
"Issue Price" 0.05p per Placing Share;
"Loan Notes" GBP2,500,000 nominal amount unsecured
convertible loan notes due 2024 constituted
by a convertible loan note instrument
dated 2 October 2019;
"London Stock Exchange" London Stock Exchange plc;
"MFDevCo" Marginal Field Development Company (MFDevCo)
Ltd;
"New Ordinary Shares" the proposed new ordinary shares of 0.0001p
each in the capital of the Company resulting
from the Share Capital Reorganisation;
"Notice" the notice of the General Meeting which
is set out at the end of this letter;
"Placing" the proposed placing of 1,000,000,000
New Ordinary Shares at a price of 0.05p
per share;
"Placing Shares" the 1,000,000,000 New Ordinary Shares
to be issued in connection with the Placing;
"Proposals" the Share Capital Reorganisation, the
Proposed Sale, the Placing, the grant
of conversion rights under the Loan Notes,
the issue of the Settlement Shares, the
grant of Warrants and the grant of Options;
"Proposed Sale" the proposed sale by the Company of its
50% interest in MFDevCo to RMRI (which
holds the remaining 50% interest in MFDevCo);
"Resolutions" the ordinary and special resolutions
set out in the Notice;
"RMRI" RMRI Ltd, a company controlled by Alan
Minty;
"Settlement Shares" 91,666,667 New Ordinary Shares to be
issued to RMRI as detailed in this document;
"Shard" Shard Capital Management Limited;
"Shareholders" the holders of Existing Ordinary Shares
or (following the Share Capital Reorganisation)
New Ordinary Shares from time to time;
"Share Capital Reorganisation" the proposed subdivision of each of the
Existing Ordinary Shares into one New
Ordinary Share and one 2019 Deferred
Share to be effected at the General Meeting,
further details of which are set out
in the Letter from the Chairman of the
Company in this circular;
"Strand Hanson" Strand Hanson Limited, Nominated adviser
to the Company;
"UKLA" the FCA acting in its capacity as the
competent authority for the purposes
of Part VI of FSMA;
"United States" the United States of America and its
respective territories;
"GBP" Pounds sterling, the lawful currency
of the United Kingdom; and
"2019 Deferred Shares" the proposed new deferred shares of 0.0999p
each in the capital of the Company to
be created pursuant to the Share Capital
Reorganisation.
Enquiries
Nu-Oil and Gas plc
Investor Relations & Communications Tel: +44 (0)330 995 7988
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Rory Murphy/Ritchie Balmer/Jack
Botros
Novum Securities Limited Tel: +44 (0) 20 7399 9425
Jon Belliss
Disclaimer
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCDMMMGZMZGLZM
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