TIDMZEN
RNS Number : 2996H
Zenith Energy Ltd
24 March 2020
March 24, 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon
publication of this announcement via a regulatory information
service ("RIS"), the inside information contained in this document
is now considered to be in the public domain.
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Renegotiation of Tilapia acquisition
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company, announces that it has entered into a
conditional Deed of Variation (the "Deed of Variation") to amend
the terms of the consideration (the "Consideration") payable for
the acquisition of an 80 per cent. interest in AAOG's fully owned
subsidiary, Anglo African Oil & Gas Congo S.A.U, ("AAOG Congo")
which has a 56 per cent. majority interest in, and is the operator
of, the Tilapia oilfield in the Republic of the Congo
("Acquisition").
Under the original terms of the Acquisition, Zenith was to pay a
consideration of GBP1 million to AAOG, of which GBP500,000 was to
be satisfied in cash to be paid in six equal monthly instalments
with the first instalment due on completion and the last being six
months later, and GBP500,000 was to be satisfied by the issue of
ordinary shares in the share capital of Zenith to be issued at the
volume weighted average price of a Zenith common share for a period
of 14 trading days prior to completion ("Consideration
Shares").
The Deed of Variation provides that the Consideration shall be
decreased by 20 per cent. to GBP800,000 to be paid in cash only and
in ten equal monthly instalments with the first payment due on
completion of the Acquisition. As a result of this amendment,
Zenith will no longer issue any equity as part of the Consideration
for the Acquisition.
The aforementioned revision to the amount of the Consideration
and the mechanism by which it is to be settled is conditional only
on the passing of a resolution (the "Resolution") to be put to
shareholders of AAOG at a general meeting (the "GM"). Otherwise,
the terms of the Acquisition, as detailed in Zenith's announcement
dated December 27, 2019, remain unchanged.
Completion of the Acquisition ("Completion") remains conditional
on certain regulatory approvals being obtained in the Republic of
the Congo including consent of the Minister of Hydrocarbons which
Zenith is expecting to achieve in due course. Completion will
therefore occur on the later of satisfaction of these regulatory
requirements or completion of the GM
If the Resolution is not passed at the GM, the Deed of Variation
will not come into effect. Consequently, the Acquisition will
proceed under the original terms of the SPA announced to the market
on December 27, 2019.
AAOG has informed Zenith that its largest shareholder, Forum
Energy Services Limited, has given an irrevocable undertaking to
vote in favour of the Resolution at the GM in respect of its
registered holding in the ordinary shares of AAOG amounting in
aggregate to 94,041,011 Ordinary Shares, representing 21.87 per
cent. of AAOG's ordinary shares in issue on March 23, 2020.
Put and Call Option Agreement
Zenith has terminated the put and call option agreement ("Put
and Call Option Agreement") entered into with AAOG and announced on
January 21, 2020.
Secured Loan Facility
The Company can also confirm that the agreement to provide a
secured loan facility (the "Facility") to AAOG for a total amount
of GBP250,000 has been terminated.
Andrea Cattaneo, Chief Executive Officer, commented:
"We are pleased to have successfully renegotiated the terms of
the Acquisition with the achievement of a 20 percent reduction and
the avoidance of any Zenith equity issuance as part of the
Consideration.
Recent world events, specifically the COVID-19 pandemic, have
severely impacted international financial markets, and, by
consequence, also negatively affected the valuation of our share
price.
In view of the above developments, we have decreased the
Consideration to reflect an adjusted asset valuation commensurate
with the decline in oil prices and to include cash only
consideration which shall be funded by means of our publicly
announced EUR 25 million EMTN Programme.
I look forward to updating the market in due course regarding
Completion."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587)
Officer 315 9031
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E-mail: info@zenithenergy.ca
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Novum Securities Limited Tel: + 44 (0)
- Broker 207 399 9400
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Charlie Brook-Partridge
-----------------------------
Hugh McAlister
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Notes to Editors :
Zenith Energy Ltd. is an international oil and gas production
company, listed on the TSX Venture Exchange (TSX.V:ZEE) and London
Stock Exchange (LSE:ZEN). In addition, the Company's common share
capital was admitted to trading on the Merkur Market of the Oslo
Børs (ZENA:ME) on November 8, 2018. The Merkur Market is a
multilateral trading facility owned and operated by the Oslo
Børs.
The Company was assigned a medium to long-term issuer credit
rating of "B+ with Positive Outlook" on October 9, 2019 by Arc
Ratings, S.A. On November 18, 2019, the Company was assigned a "B+"
with Stable Outlook debt issuer credit rating by Rating-Agentur
Expert RA.
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
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