TIDMZEN
RNS Number : 5685M
Zenith Energy Ltd
17 September 2019
September 17, 2019
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")
Reduction of Debt
Zenith Energy Ltd., ("Zenith" or the "Company"), (LSE: ZEN;
TSX.V: ZEE; OSE: ZENA-ME), the international oil & gas
production company operating the largest onshore oilfield in
Azerbaijan, is pleased to provide an update regarding its debt
position.
Debt Reduction
The Company is pleased to confirm that it has reduced its
short-term debt by approximately US$2,175,000 during the past 14
months.
Loan Facility for US$1,485,000 and accrued interest
As announced on August 5, 2019, the Company was notified by the
guarantor of the facility, Mr. Andrea Cattaneo, who serves as Chief
Executive Officer of Zenith, that he had received legal advice
towards initiating a process of litigation against the lender in
view of the fact that his guarantee may have been obtained
unlawfully.
The full amount of the principal, and related accrued interest,
of the Loan Facility is represented and accounted as a liability in
the audited Annual Financial Report of the Company as of March 31,
2019, and most recently in the unaudited Q1 Financial Statements as
of June 30, 2019 for a total amount of US$2,080,523.
The result of the potential litigation could be a reduction or
cancellation of the liability in relation to the Loan Facility.
The Company can confirm that it has begun negotiations with the
lender to settle the liability at a significant discount in
consideration of the aforementioned.
Debt Settlement
The Company has agreed to issue 1,245,904 common shares (the
"Settlement Shares"), which consist of: (1) 923,323 Settlement
Shares at a deemed price of CAD$0.11 (approximately GBP0.068) per
Settlement Share to settle a debt of 75,213 Swiss Francs owed by
the Company; and (2) 322,581 Settlement Shares at a deemed price of
CAD$0.052 per Settlement Share (equivalent to approximately
GBP0.031 per Settlement Share) to settle a debt of GBP10,000 owed
by the Company (collectively, the "Share Settlements"). The
Settlement Shares, issued pursuant to the Share Settlements, will
be subject to a four-month hold period under the rules and
regulations of the TSX Venture Exchange and applicable Canadian
securities laws. The Share Settlements are subject to the
acceptance of the TSX Venture Exchange.
Conversion of Convertible Loan Facility
The Company has received a Conversion Notice ("Conversion") from
the consortium of lenders (the "Lenders") for the US$1,500,000
Convertible Loan Facility ("Convertible Loan") announced on
September 5, 2018.
The Conversion has been made for a total of 5,343,774 common
shares (the "Conversion Shares") at a price of GBP0.021 per
Conversion Share equivalent to a total amount of US$140,000.
Zenith can confirm that the total outstanding liability in
relation to the Convertible Loan will now stand at US$560,000
following the Conversion.
On March 11, 2019, the Company announced that it had favourably
renegotiated the Convertible Loan to include a fixed conversion
price of GBP0.0505 ("Fixed Conversion Price") for the Convertible
Loan Facility which expired on September 1, 2019.
The Company also announced that it had agreed with the Lenders
to amend the terms of the Convertible Loan to include the
possibility of optional redemptions (the "Optional Redemption") to
be made by the Company in lieu of conversion of the Convertible
Loan by the Lenders for set redemption amounts (the "Redemption
Amounts") amortised across the duration of the Facility.
Zenith can confirm that it has paid a total of US$600,000 in
Optional Redemptions to reduce the total outstanding liability in
relation to the Convertible since the aforementioned revised terms
were agreed.
Total Voting Rights
The Company wishes to announce, in accordance with the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules, the
following information following Admission of the Common Shares
issued in the Placing:
Class of share Total number Number Total number
of shares of voting of voting rights
rights per class of
per share share
Common Shares
in issue and admitted
to trading on
the Main Market
of the London
Stock Exchange 265,982,454 1 265,982,454
------------------------ ------------ ------------------------
Common Shares
in issue and admitted
to trading on
the TSXV 368,122,107 1 368,122,107
------------------------ ------------ ------------------------
Common Shares
in issue and admitted
to trading on
the Merkur Market
of the Oslo Børs 368,122,107 1 368,122,107
------------------------ ------------ ------------------------
No Common Shares are held in treasury. The above figure for
total number of Common Shares may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in, the Company under the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules.
Andrea Cattaneo, Chief Executive Officer of Zenith,
commented:
"I am very pleased that we are significantly reducing our debt
position by taking a number of steps to strengthen our balance
sheet.
Beyond the evident benefits, this should also help Zenith
improve its issuer credit rating of B+ with Positive Outlook to
secure debt financing at more favourable terms to support its
future development.
Our near-term operational progress will play a determining role
towards enabling the Company towards further achieving this
goal."
Further Information:
Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Tel: +1 (587) 315 9031
Officer
-----------------------------
E-mail: info@zenithenergy.ca
-----------------------------
Peterhouse Capital - Joint Broker Tel: + 44 (0) 207 469
0930
-----------------------------
Lucy Williams
-----------------------------
Charles Goodfellow
-----------------------------
Novum Securities Limited - Joint Tel: + 44 (0) 207 399
Broker 9400
-----------------------------
Charlie Brook-Partridge
-----------------------------
Hugh McAlister
-----------------------------
IFC Advisory Limited - Financial Tel: + 44 (0) 203 934
PR & IR 6630
-----------------------------
Graham Herring
-----------------------------
Zach Cohen
-----------------------------
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 8, 2018 by Arc
Ratings, S.A.
The Company operates the largest onshore oilfield in Azerbaijan
following the signing of a 25-year REDPSA, (Rehabilitation,
Exploration, Development and Production Sharing Agreement), with
SOCAR, State Oil Company of the Republic of Azerbaijan, in
2016.
The Company's primary focus is the development of its Azerbaijan
operations by leveraging its technical expertise and financial
resources to maximise low-cost oil production via a systematic
field rehabilitation programme intended to achieve significantly
increased revenue. Zenith also operates, or has working interests
in, a number of natural gas production concessions in Italy. The
Company's Italian operations produce natural gas, condensate and
electricity.
Zenith's development strategy is to identify and rapidly seize
value-accretive hydrocarbon production opportunities in the onshore
oil & gas sector. The Company's Board of Directors and senior
management team have the experience and technical expertise to
develop the Company successfully.
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
MSCLIFEEARIDLIA
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