SeaEnergy PLC Trading and Working Capital Funding Update (8597G)
November 25 2015 - 2:05AM
UK Regulatory
TIDMSEA
RNS Number : 8597G
SeaEnergy PLC
25 November 2015
SeaEnergy PLC
("SeaEnergy", the "Company" or the "Group")
Trading and Working Capital Funding Update
SeaEnergy, the innovation-led offshore energy services business,
is pleased to announce that it has agreed a working capital funding
package under which it can draw up to GBP1.0 million over the next
12 months.
During 2015, sustained low oil prices have very severely
impacted levels of business in the core R2S offering as well as in
other parts of the Group. Revenue from continuing business for the
year ending 31 December 2015 is now expected to be between GBP2.6
and GBP2.8 million, resulting in a significant loss. While software
licence income has held up well and forensic activities are ahead
of forecast, the weakness in the oil price and consequent reduction
in oil company operating budgets have severely impacted new capture
and recapture activities and levels of digital media work.
In addition, SeaEnergy has now handed over operational
responsibility for the ships previously under management and
expects to have completed its exit from ship management by the end
of the year.
The Directors of SeaEnergy anticipate a recovery in the core R2S
business into 2016, as offshore field operators' activity levels
pick up, and efforts to grow the business through
internationalisation and diversification start to bear fruit. In
the UK, the Group has recently won a number of R2S capture projects
with total value of around GBP150,000 and the Directors have been
pleased that R2S licence renewals have continued despite the
operational downturn. This further demonstrates the value of the
R2S software/service in driving down overall supply chain costs.
The Group will make further announcements on new work in due
course.
The Board has reviewed a number of options to address a
shortfall in working capital resulting from the reduced R2S
business levels. The options included an equity fundraising, but
the Board has opted for a short term debt-based approach in order
to minimise long term dilution to shareholders.
On 24 November 2015, the Company signed loan agreements with
Davies Newman Property Limited, a Scottish-based company with
interests in property and oil & gas, and LC Capital Master
Fund, Ltd (together the "Lenders") (the "Agreement(s)").
Under the Agreements, each of the Lenders will provide a secured
facility of GBP500,000 to the Company (the "Facilities") on the
same terms.
The Facilities will each be repayable on 30 April 2017 and
accrue interest at 10% per annum, payable semi-annually. In the
event of default, an interest rate of 18% will apply to the
outstanding balance and the facility will become repayable
immediately. In addition the Lenders will each receive warrants to
subscribe for up to 2,500,000 new ordinary shares in the Company at
an exercise price of 10p per share exercisable at any time within
five years of the date of grant (the "Warrants").
LC Capital Master Fund, Ltd, a US-based hedge fund which holds a
7% interest in the share capital of the Company is controlled by
Steven Lampe, a non-executive director of SeaEnergy, and is
therefore a related party of the Company under Rule 13 of the AIM
Rules for Companies. Davies Newman Property Limited is not a
related party of either the Company or LC Capital Master Fund.
The Directors of SeaEnergy (excluding Steven Lampe) consider,
having consulted with WH Ireland Limited, the Company's nominated
adviser, that the terms of the Agreement with LC Capital Master
Fund, Ltd and the terms of grant of the Warrants to LC Capital
Master Fund, Ltd are fair and reasonable insofar as the Company's
shareholders are concerned.
The Directors believe that, in light of the currently
anticipated upturn in R2S business and other work in 2016, together
with significant cost reductions in central costs (including an
extension through 2016 of the voluntary salary waivers by the
Directors which began in June 2015), the Facilities, in addition to
the existing HSBC overdraft facility, should be sufficient for the
Group's working capital requirements for the foreseeable
future.
ENDS
John Aldersey-Williams
Chief Executive Officer
Tel: +44 1224 748 480
Claire Fleming
Corporate Communications & Research Manager
Tel: +44 7880 358920
Tim Feather/Liam Gribben
Nominated Adviser and Broker
WH Ireland Limited
Tel: 0113 394 6600
This information is provided by RNS
The company news service from the London Stock Exchange
END
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