TIDMECHO
RNS Number : 2616E
Echo Energy PLC
05 May 2017
Echo Energy plc
("ECHO" or the "Company")
Authority to allot shares, warrants and disapply pre-emption
rights
Proposed Consolidation of Ordinary Shares
and
Posting of Circular and Notice of General Meeting
Further to the announcement on 18 April 2017, the Company will
today post to its Shareholders a circular (the "Circular")
containing a notice convening a general meeting to be held at 1.00
p.m. on 22 May 2017 at the Amba Hotel, Charing Cross, The Strand,
London WC2N 5HX.
The following has been extracted without material amendment from
the Circular which will be available shortly from the Company's
website at www.echoenergyplc.com. The same definitions apply
throughout this announcement as are applied in the Circular.
1. Introduction
On 18 April 2017, the Company announced a Latin American gas
strategy focused on multi Tcf (trillion cubic feet), low cost,
onshore gas piped to high value, growing markets. Simultaneously,
and in support of this strategy, the Company announced a
non-binding heads of terms relating to a GBP23M institutional
funding.
Further to the announcement on 18 April 2017 of the signing of
non-binding heads of terms, the Company is proposing to seek
authority to allot shares pursuant to the Subscription and Warrants
pursuant to the Warrant Issue.
The Company is also proposing to consolidate its Existing
Ordinary Shares pursuant to the Consolidation.
2. Background to and reasons for the proposals
The Company believes that the combination of economic growth
across parts of the LATAM region and the increasing forecast
shortage of gas in the major markets of Brazil and Argentina,
together with a historic period of regional underinvestment in the
sector provides a compelling investment proposition for investors
at this specific point in the cycle.
The Company therefore plans to acquire a series of assets across
the region, leveraging existing pipeline infrastructure and
processing capability thereby enabling any new discoveries to be
brought to market quickly. The Company intends to selectively bring
in pre-identified strategic partners to the business to fund and
technically de-risk such assets.
The Company anticipates this Subscription will fund the
commencement of its asset and portfolio acquisition strategy and
now requires a General Meeting to provide the necessary
authorities.
The Company's current issued share capital consists of
approximately 6.1 billion Existing Ordinary Shares. The Board
considers that the current issued share capital is considerably
higher than similar sized companies on AIM and it believes that
this negatively affects investors' perception of the Company.
Accordingly, following consultation with certain of the Company's
Shareholders, the Consolidation is being proposed in order to
reduce the number of Ordinary Shares that are in issue to a level
more in line with other comparable companies traded on AIM. The
Directors believe that the Consolidation should improve the
liquidity and marketability of Ordinary Shares to a range of
investors, including institutional investors. The Board is
confident that the Consolidation will make the Ordinary Shares a
more attractive investment proposition.
3. Share Authorities
In order to effect:
(a) the Subscription;
(b) the issue of warrants pursuant to the terms of the
Subscription and the Loan Note Issue; and
(c) the issue of the Initial Greenberry Warrants,
the Company has convened the General Meeting to seek appropriate
shareholder authorities to enable it to effect the Subscription and
the relevant issues of Warrants. In addition, the Company is
seeking further general authorities to issue Ordinary Shares for
cash on a non-pre-emptive basis to be limited to a maximum of 33
per cent of the Company's Enlarged Share Capital.
4. The Consolidation
At the General Meeting, the Directors are inviting Shareholders
to approve a Resolution which will authorise the Consolidation. The
share capital of the Company will be re-organised by consolidating
all of the Existing Ordinary Shares as at close of business on 22
May 2017 into ordinary shares of 0.25 pence on the basis of one
Consolidated Share for every 25 Existing Ordinary Shares, such
shares having the same rights and being subject to the same
restrictions (save as to nominal value) as the Existing Ordinary
Shares as set out in the Articles.
Following the Consolidation, the number of warrants in issue
will be adjusted in line with the ratio of the Consolidation and
the exercise price of each issued warrant will be adjusted
accordingly.
The Consolidation will take effect on 23 May 2017, being the
date of Admission.
Application will be made for the Consolidated Shares to be
admitted to trading on AIM in place of the Existing Ordinary
Shares. Subject to the shareholder approval of Resolution 5, it is
expected that admission to AIM will become effective and that
dealings in the Consolidated Shares will commence on 23 May
2017.
Following the Consolidation, the Company's new ISIN Code will be
GB00BF0YPG76 and its new SEDOL Code will be BF0YPG7.
CREST and share certificates
For shareholders who hold their shares in uncertificated form it
is expected that Consolidated Shares will be credited to
shareholders' CREST accounts on 23 May 2017.
Certificates representing Existing Ordinary Shares will no
longer be valid if the Consolidation is approved at the General
Meeting. For shareholders who hold their shares in certificated
form, new share certificates in respect of the Consolidated Shares
are expected to be posted by Share Registrars to certificated
shareholders in their new form by 2 June 2017. The new share
certificates will be sent by first class post at the risk of the
shareholder.
5. General Meeting
A notice convening a General Meeting of the Company, to be held
at the Amba Hotel, Charing Cross, The Strand, London WC2N 5HX on 22
May 2017 at 1:00 p.m. is set out in the Circular. At the General
Meeting, the following Resolutions will be proposed:
(1) an ordinary resolution to grant authority to the Directors
to allot Ordinary Shares and the Warrants pursuant to section 551
of the Act, being up to an aggregate nominal amount of
GBP1,029,315;
(2) subject to and conditional on the passing of the resolution
referred to in paragraph 1 above, a special resolution to disapply
the statutory pre-emption rights contained in section 561(1) of the
Act in respect of the allotment of Ordinary Shares and the Warrants
with an aggregate nominal amount of up to GBP1,029,315;
(3) an ordinary resolution to grant a general authority to the
Directors to allot up to 122,951,200 Consolidated Shares in the
capital of the Company or to grant rights to subscribe for or
convert any security into shares in the capital of the Company
pursuant to section 551 of the Act, being up to an aggregate
nominal amount of GBP307,378. This authority will be limited to not
more than 33 per cent. of the Enlarged Share Capital. The authority
will expire at the conclusion of the next Annual General Meeting of
the Company;
(4) a special resolution to disapply the statutory pre-emption
rights contained in section 561(1) of the Act in respect of the
allotment of up to 122,951,200 equity shares with an aggregate
nominal amount of up to GBP307,378. This authority will be limited
to not more than approximately 33 per cent. of the Enlarged Share
Capital. The authority will expire at the conclusion of the next
Annual General Meeting of the Company; and
(5) an ordinary resolution to consolidate the Company's ordinary
share capital on the basis of one Consolidated Share for every 25
Existing Ordinary Shares as at close of business on 22 May
2017.
6. Directors' recommendation
The Directors consider the Resolutions to be in the best
interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting.
For further information please contact:
Independent Resources / Echo Energy
James Parsons, Chairman
Greg Coleman, Chief Executive Officer j.parsons@echoenergyplc.com
g.coleman@echoenergyplc.com
ZAI Corporate Finance Limited - Nominated Adviser +44 (0) 20 7060 2220
John Treacy / Peter Trevelyan-Clark / Jamie Spotswood
Brandon Hill Capital Limited - Broker +44 (0) 20 3463 5000
Jonathan Evans / Oliver Stansfield
The information contained within this announcement is considered
to be inside information prior to its release as defined in Article
7 of the Market Abuse Regulation No. 596/2014 and is disclosed in
accordance with the Company's obligations under Article 17 of those
Regulations.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Posting of the Circular and Form 5 May 2017
of Proxy
Last time and date for receipt 1:00 p.m. on 18 May
of Forms of Proxy 2017
1:00 p.m. on 22 May
General Meeting 2017
close of business
Record date for the Consolidation on 22 May 2017
Admission and commencement of 8:00 a.m. on 23 May
dealings in the Consolidated 2017
Shares following the Consolidation
References to the time in this document and Notice of General
Meeting are to British Summer Time (BST).
KEY STATISTICS
Total number of Ordinary Shares
as at the date of this document 6,157,367,008
Total number of warrants in issue
at the date of this document* 2,871,676,140
Total number of options granted
at the date of this document 1,565,455,734
* This includes 1,007,583,127 warrants to be issued to
Greenberry following the General Meeting pursuant to the loan
agreement entered into with Greenberry on 3 March 2017.
DEFINITIONS
The following definitions apply throughout this document unless
the context otherwise requires:
"Act" the UK Companies Act 2006 (as
amended from time to time)
"Admission" the admission to trading on AIM
of the Consolidated Shares taking
place in accordance with the
AIM Rules for Companies
"AIM" the market of that name operated
by the London Stock Exchange
"AIM Rules for the AIM Rules for Companies,
Companies" as published and amended from
time to time by the London Stock
Exchange
"Articles" the articles of association of
the Company as at the date of
this document
"Board" the board of directors of the
Company from time to time
"certificated" not in uncertificated form
or "certificated
form"
"Company" or "Echo Echo Energy plc, a company incorporated
Energy" in England and Wales with registered
number 5483127
"Consolidated the ordinary shares of 0.25p
Shares" each in the capital of the Company
following the Consolidation
"Consolidation" the proposed consolidation of
every 25 Existing Ordinary Shares
into one Consolidated Share
"CREST" the relevant system for the paperless
settlement of trades and the
holding of uncertificated securities
operated by Euroclear UK & Ireland
in accordance with the CREST
Regulations
"CREST Regulations" the Uncertified Securities Regulations
2001, as amended
"Directors" the directors of the Company
"Enlarged Share the issued ordinary share capital
Capital" of the Company immediately following
Admission, the Consolidation
and the Subscription
"Euroclear UK Euroclear UK & Ireland Limited,
& Ireland" or the operator of CREST
"Euroclear"
"Existing Ordinary the existing ordinary shares
Shares" of 0.01p each in the capital
of the Company
"Form of Proxy" the form of proxy relating to
the General Meeting being sent
to Shareholders
"General Meeting" the general meeting of the Company
convened for 1.00 p.m. on 22
May 2017 (or any adjournment
of it
"Greenberry" Greenberry Plc of 43A/1 Saint
Paul's Building, West Street,
Valletta VLT 1532, Malta
"Greenberry Loan the proposed issue of EUR15,000,000
Notes" aggregate principal amount of
Secured Notes 2017 of the Company
to be listed on the Official
List of the Luxembourg Stock
Exchange and issued to Greenberry
"Greenberry Warrants" the proposed issue of warrants
to Greenberry to subscribe for
ordinary shares of the Company
"Group" the Company and its subsidiary
undertakings
"Initial Greenberry the 1,007,583,127 warrants to
Warrants" be issued to Greenberry being
the balance outstanding pursuant
to a warrant instrument of the
Company dated 3 March 2017
"LATAM" Latin America
"Loan Note Issue" the proposed issue of the Greenberry
Loan Notes
"London Stock London Stock Exchange plc
Exchange"
"Ordinary Shares" Existing Ordinary Shares or Consolidated
Shares, as the context requires
"Resolutions" the resolutions set out in the
notice of the General Meeting
"Shareholders" holders of Ordinary Shares
"Subscription" the proposed subscription of
new Ordinary Shares to raise
gross proceeds of approximately
GBP10 million
"Subscription the proposed issue of warrants
Warrants" to subscribe for ordinary shares
of the Company in connection
with the Subscription
"subsidiary" a "subsidiary undertaking" as
that term is defined in the Act
"uncertificated" recorded on the relevant register
or "uncertificated or other record of the share
form" or other security concerned as
being held in uncertificated
form in CREST, and title to which,
by virtue of the CREST Regulations,
may be transferred by means of
CREST
"United Kingdom" the United Kingdom of Great Britain
or "UK" and Northern Ireland
"GBP" or "Pounds" UK pounds sterling, being the
lawful currency of the United
Kingdom
"Warrant Issue" the proposed issue of the Initial
Greenberry Warrants, the Greenberry
Warrants and the Subscription
Warrants
"Warrants" the Initial Greenberry Warrants,
the Greenberry Warrants and the
Subscription Warrants
"ZAI" ZAI Corporate Finance Limited,
the Company's nominated adviser
This information is provided by RNS
The company news service from the London Stock Exchange
END
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