TIDMAST
RNS Number : 1843W
Ascent Resources PLC
17 August 2015
Ascent Resources plc
("Ascent" or the "Company")
Posting of Circular, Notice of General Meeting and Board
Changes
Posting of Circular and Notice of General Meeting
Ascent announces that it is posting a circular to Shareholders
containing a Notice of General Meeting at which resolutions will be
proposed in order to grant authority to the Directors to issue and
allot equity securities of the Company up to an aggregate nominal
value of GBP1,500,000 for cash, without being required to offer
those equity securities on a pre-emptive basis.
The General Meeting is to be held at the offices of finnCap Ltd,
60 New Broad Street, London, EC2M 1JJ at 3:30 p.m. on Thursday 3
September 2015.
A copy of the circular will be available on the Company's
website at www.ascentresources.co.uk.
Board Changes
In recognition of the Company's current funding position,
management changes are being implemented with a view to conserving
the Company's funding, in particular until the IPPC permit is
awarded in final form. The principal change is that Len Reece,
Ascent's CEO over the past 3 years, resigned as a Director of the
Company on 14(th) August 2015 and the Company has commenced a
redundancy process in relation to his role as CEO.
Enquiries
Ascent Resources plc
Colin Hutchinson +44(0) 20 7251 4905
finnCap Ltd (Nominated Adviser and Broker)
Christopher Raggett / Emily Watts +44(0) 20 7220 0500
Timetable
Announcement 17 August 2015
Dispatch of the Circular 18 August 2015
Latest time and date for receipt 3.30 p.m. on 1
of Forms of Proxy for the General September 2015
Meeting
General Meeting 3.30 p.m. on 3
September 2015
Each of the times and dates above are subject to change. Any
such change will be notified to Shareholders by an announcement on
a Regulatory Information Service.
Introduction
The Directors are in negotiations with several potential sources
of additional financing, although no terms have yet been agreed.
Whilst the Company has the GBP7 million loan facility from
Henderson to support its working capital requirements, draw down of
the facility is at the sole discretion of Henderson and therefore
this should not be relied upon as a sole source of financing.
Accordingly the Directors believe that it is prudent to have the
ability to procure additional funds through the issue of new
Ordinary Shares on a non-pre-emptive basis.
Background
Ascent, with its partner Geoenergo, continues to work to develop
the Petišovci field in Slovenia. To date some EUR42 million has
been spent on the project, which it is hoped will supply a
significant proportion of Slovenia's gas requirement for well over
a decade. In recognition of the key strategic importance of the
project, earlier this year the Slovenian government designated
Nafta Lendava, the state owned oil and gas company, which holds an
interest in the Petišovci project through its shareholding in
Geoenergo, as one of 21 important national assets.
The preferred field development plan consists of the
installation of a gas gathering and separation station ("GGSS") for
dew point control and to reduce the CO(2) content of the gas to
meet national pipeline specifications; the upgrade of a measuring
station at the entry point to the national grid and the
construction of pipelines and flow lines to connect the wells to
the GGSS and the GGSS to the measuring station.
IPPC permit
Under EU Directives adopted by the Slovenian Government the
installation of the GGSS requires an IPPC permit. In July 2014 the
application was completed and submitted to the Environmental Agency
("ARSO") for approval. In December 2014 ARSO announced that the
IPCC permit was approved subject to a public consultation.
Current position
In June 2015 ARSO announced that following the public
consultation the Permit had been provisionally awarded subject to a
period for appeals. In August 2015 the Company received formal
notification that two parties had lodged appeals.
The response to the appeal has already been submitted. The
appeals will be heard in the first instance by the Environment
Ministry with potentially a further appeal to the courts. Until the
appeal process has been exhausted, the Company and its partners are
not able to finalise bank funding to start construction work.
Although there can be no guarantee that the IPPC permit will be
issued, based on legal advice received to date the Board of Ascent
remains firmly of the view that the required IPPC permit will be
issued in final form. What is less certain is the time that the
appeal process will take; guidelines suggest that the first appeal
should take a maximum of two months and the second a maximum of
three months, however in practice these guidelines are sometimes
exceeded. Should the process be referred to the Slovenian courts it
is likely that the final permit would not be awarded until
2016.
It is therefore the priority of the Company to minimise
expenditure until the IPPC permit award is unconditional. In the
meantime work continues to explore alternative routes to market for
the gas.
Current Funding
In May 2015 the Company agreed a GBP7 million facility with
Henderson Global Investors. Whilst the facility was not intended to
be used to cover delays in permitting, the Company has recently
agreed the drawdown of the first GBP250,000 of this facility to
fund its immediate working capital requirements.
Without the Additional Authority, the Company is currently
reliant on Henderson permitting drawdown of the facility to fund
its working capital. The Company is conscious that using a short
term overdraft to bridge this funding gap is not an ideal solution
to meeting its funding needs, but is constrained on raising fresh
equity capital by the need to convene shareholder meetings to grant
the Directors the authority required to issue shares for cash to
investors, who might not agree to be committed during the notice
period required for a general meeting seeking those
authorities.
The Board therefore wishes to give the Company the option to
bring such new investors and new investment into the Company
through the issue of new equity. To that end we are proposing to
put the Resolutions to Shareholders, which if passed would allow
the Company to issue 1,500,000,000 shares for cash without further
recourse to Shareholders.
Other funding discussions
As previously announced, the Company has held discussions with a
range of parties interested in participating in a farm out.
Discussions are well advanced with several parties. Discussions are
expected to continue until the end of Q3 2015 and there is no
certainty that any transaction will result.
The Company also continues to have positive discussions with
banks who, following lengthy due diligence, have expressed firm
interest in providing up to EUR20 million of debt funding to the
project. These funds would only be available once the IPPC permit
has been declared valid and additional equity investment has been
secured.
Board Changes
In recognition of the Company's current funding position,
management changes are being implemented with a view to conserving
the Company's funding, in particular until the IPPC permit is
awarded in final form. The principal change is that Len Reece,
Ascent's CEO over the past 3 years, resigned as a Director of the
Company on 14(th) August 2015 and the Company has commenced a
redundancy process in relation to his role as CEO.
General Meeting
Set out at the end of the Circular is a notice convening a
General Meeting of the Company to be held at 3.30 p.m. on Thursday
3 September 2015 at the offices of finnCap, 60 New Broad Street,
London, EC2M 1JJ, at which the Resolutions will be proposed.
The Company is proposing that Shareholders pass the Resolutions
in order to:
(a) grant authority to the Directors under section 551 of the
Act, to allot relevant securities in the Company; and
(b) empower the Directors, pursuant to section 570 of the Act,
to disapply statutory pre-emption rights in relation to the
allotment of equity securities.
Definitions
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Act" the Companies Act 2006,
as amended from time
to time
"Additional Authority" the authority to be
granted to the Directors
pursuant to the Resolutions
to allot further equity
securities up to an
aggregate nominal amount
of GBP1,500,000.00 pursuant
to Section 570 of the
Act to allot equity
securities (as defined
in Section 560 of the
Act), for cash
"AIM" the market of that name
operated by the London
Stock Exchange
"AIM Rules" the AIM rules for Companies
published by the London
Stock Exchange from
time to time
"Circular" the circular to be posted
to Shareholders containing
information about the
Additional Authority
and General Meeting
"Company" or "Ascent" Ascent Resources plc
"Directors" or "Board" the directors of the
Company as at the date
of this document whose
names and functions
are set out on page
6 of this document,
or any duly authorised
committee thereof
"EU" the European Union
"finnCap" finnCap Ltd, the Company's
nominated adviser and
broker
"General Meeting" the general meeting
of the Company convened
for 3.30 p.m. on 3 September
2015
"Henderson" (1) Henderson Global
Investors Limited in
its capacity as discretionary
investment manager of
The Strathclyde Pension
Fund and Henderson UK
and Irish Smaller Companies
Fund; and Henderson
Alternative Investment
Advisor Limited in its
capacity as discretionary
investment manager of
The Alphagen Volantis
Fund Limited, Henderson
UK Small Cap Best Ideas
Fund and The Citigroup
Pension Plan Investment
Committee, both of 201
Bishopsgate, London
EC2M 3AE, or either
of them as the context
shall require
"Henderson Facility" (2) the 7.5 per cent.
GBP7million loan provided
by Henderson to the
Company, details of
which were announced
by the Company through
RIS on 12 May 2015
"IPPC" Integrated Pollution
Prevention and Control
Permit
"London Stock Exchange" London Stock Exchange
plc
"Notice of General Meeting" the notice of General
or "Notice" Meeting set out at the
end of the Circular
"Ordinary Shares" ordinary shares of 0.1
pence each in the capital
of the Company
"Resolutions" the resolutions set
out in the Notice
"RIS" or "Regulatory a regulatory information
Information Service" service approved by
the London Stock Exchange
for the purposes of
the AIM Rules
"Shareholders" holders of Ordinary
Shares from time to
time
"United Kingdom" or the United Kingdom of
"UK" Great Britain and Northern
Ireland
A reference to GBP is to pounds sterling, being the lawful
currency of the UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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