Independent Resources PLC Update on status of Loan Note payable (1241H)
August 15 2016 - 1:00AM
UK Regulatory
TIDMIRG
RNS Number : 1241H
Independent Resources PLC
15 August 2016
Independent Resources plc
("IRG" or the "Company")
Update on status of Loan Note payable in respect of the
Company's acquisition of its interest in the East Ghazalat
concession.
Receipt of default claim from TransGlobe Petroleum International
Inc. ("Trans Globe"), which the Company considers to be unfounded
and without merit
In its announcement of its results for the financial year ended
31 December 2015, released on 30 June 2016, the Company provided
the following update on the status of its discussions with
TransGlobe Petroleum International Inc ("TransGlobe") on the status
of the loan note ("Loan Note") issued to TransGlobe by Independent
Resources Egypt Limited ("IRE") , the Company's joint venture
vehicle ("JV") owned jointly with Nostra Terra Oil and Gas plc (
"NTOG") , in connection with IRE's acquisition of its interest in
the East Ghazalat concession:
"The loan note principal payable to Trans Globe is determined
only on formal agreement of the final working capital adjustment as
provided in the sale and purchase agreement. The loan note
principal is varied with that working capital adjustment. We
continue to work with Trans Globe to determine the final working
capital amount and thus the loan note principal. At 31 December
2015 we have provided for the loan note principal based on Trans
Globe's initial assessment of working capital at completion and
provided for accrued interest on this estimate although we have not
yet made the interest payment that could have been due at March 31,
2016 since the loan note amount is not finalised."
As previously announced by the Company on 10 May 2016, the Loan
Note is guaranteed by both the Company and NTOG on a joint and
several basis.
The Company has now been notified by TransGlobe that it
considers that IRE is in default of its obligations under the Loan
Note since it has not paid accrued interest of c.$117,000 which it
claims was due on 31 March 2016 and is claiming immediate repayment
of the entire principal amounts of the Loan Note and all unpaid
accrued interest thereon.
The Company rejects TransGlobe's basis of claim and remains
confident that it is not due to pay any interest on the Loan Note
until the quantum of the Loan Note has been established in
accordance with the provisions of the sale and purchase agreement
relating to the acquisition of East Ghazalat ("SPA") as described
in its announcement released on 30 June 2016.
The Company has advised TransGlobe that it does not consider
that TransGlobe has complied with the relevant provisions of the
SPA in this matter including but not limited to:
-- TransGlobe failing to satisfy the requirement to provide
evidence to substantiate its estimate of the working capital of
TransGlobe GOS Inc. at legal completion of the sale of that entity
to IRE which has a direct 'dollar-for-dollar' impact upon the
principal of the Loan Note; and
-- TransGlobe's failure to comply with the procedures specified
in the SPA whereby TransGlobe is required to submit a draft
statement of the sale entity's working capital position to IRE for
review and possible challenge within 30 business days of receipt of
the draft statement. IRE has the right under the SPA, to resolve
any dispute relating to the quantum of the sale entity's working
capital by referring the dispute to arbitration by an independent
accountant;
and that, accordingly, its claim of default is unfounded and
without merit.
IRG intends to address the default notice by meeting imminently
with TransGlobe in order to commence negotiations to reach a
mutually acceptable solution. Notwithstanding that, IRG reserves
all rights to take any and all actions required to protect the
Company. The Company will continue to update the market as events
develop.
The JV continues to actively progress Egyptian registration
procedures to enable collection of accrued revenues and the Company
continues to actively progress discussions with a number of parties
regarding the provision of equity and/or debt funding in order to
provide additional working capital. The Company also continues to
engage in discussions with third parties regarding the provision of
funding for work programme activities on the Ksar Hadada licence in
Tunisia.
For more information, please visit www.ir-plc.com or
contact:
Greg Coleman Independent Resources plc 020 3367 1134
Adam James Panmure Gordon (UK) Limited 020 7886 2500
(Nominated Adviser & Joint Broker)
Oliver Stansfield Brandon Hill Capital 020 3463 5000
Jonathan Evans (Joint Broker)
Simon Hudson Tavistock Communications 020 7920 3150
This information is provided by RNS
The company news service from the London Stock Exchange
END
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