09 February 2009
Lansdowne Oil & Gas plc (“Lansdowne” or “the Company”)
New loan facility, extension of existing loan facilities and reissue of warrants to subscribe for new ordinary shares
Lansdowne Oil & Gas plc (AIM: LOGP), the Dublin-based exploration company announces that it has agreed: (1) terms for a new loan facility from one of its principal shareholders and associated reissue of warrants over new ordinary shares; and (2) an extension to the terms of certain existing loan facilities.
New loan facility and reissue of warrants
Lansdowne announces that it has entered into a loan agreement with one of its principal shareholders, LC Capital Master Fund, Ltd (“LC”), pursuant to which LC has agreed to provide Lansdowne with a loan facility of up to £500,000 (the “New Facility”), the drawdown of which is conditional upon the Company giving LC certain representations and undertakings at the time of drawdown. Interest shall accrue at the rate of LIBOR plus one per cent. per annum and shall be paid at the same time as repayment of the loan. Repayment in full, in cash, together with all accrued interest shall be effected on 12 March 2010 (or such later date as the Company and LC may agree). The loan becomes repayable immediately on the occurrence of certain specified events. By way of security for the New Facility the Company has granted legal charges in favour of LC over the Company’s shareholdings in its wholly owned subsidiaries, Lansdowne Celtic Sea Limited and Milesian Oil & Gas Limited.
The Company announced on 29 November 2007 that it had executed a warrant instrument, pursuant to which the Company granted warrants to subscribe for up to 1,750,000 new ordinary shares in its capital to LC at an exercise price of 50 pence per share (the “2007 LC Warrants”). The 2007 LC Warrants were exercisable in whole or in part on or prior to 31 May 2009. None of the 2007 LC Warrants have been exercised to date. The Company’s share price has been less than the 50 pence warrant exercise price for the last 14 months. The mid-market price of the Company’s shares at close of dealings on 6 February 2009, being the last business day prior to this announcement, was 7.25 pence. The Company has therefore executed a new warrant instrument, pursuant to which the Company has granted warrants to subscribe for up to 1,750,000 new ordinary shares of 5 pence each in the capital of the Company to LC at an exercise price of 10 pence per share (the “New LC Warrants”) in exchange for LC cancelling the 2007 LC Warrants held by it. The New LC Warrants are exercisable in whole or in part on or prior to 12 March 2010. The number of warrants is subject to appropriate adjustment in the event of the Company’s ordinary share capital being sub-divided, consolidated or otherwise reorganised. The Company shall apply for all new ordinary shares issued upon the exercise of the New LC Warrants to be admitted to trading on AIM or such other recognised investment exchange on which the Company’s ordinary share capital is traded at that time.
As a consequence of the cancellation of the 2007 LC Warrants and the granting of the New LC Warrants, LC’s maximum potential interest in the Company will remain unchanged at 62.1 per cent. of the enlarged issue share capital of the Company and has not increased as a result of this transaction.
Extension of existing loan facilities
The Company announced on 29 November 2007 that it had entered into a loan agreement with each of Kevin Anderson and LC (Mr Anderson and LC being the “Existing Lenders”) on the same terms (the “2007 Loan Agreements”), pursuant to which each of the Existing Lenders agreed to provide the Company with a loan facility of up to £500,000 (total facilities of up to £1 million) (the “2007 Facilities”). The full amount of the 2007 Facilities has been drawn down by Lansdowne. Interest is accruing at the rate of LIBOR plus one per cent. per annum and shall be paid at the same time as repayment of the 2007 Facilities. The terms of the 2007 Loan Agreements provide for repayment of the loans in full and in cash together with all accrued interest by not later than 12 March 2009 (or such other date as the Company and the Existing Lenders may agree). It would suit the Company to postpone repayment of the 2007 Facilities beyond 12 March 2009. The Company has therefore agreed with each of the Existing Lenders to extend the terms of the 2007 Facilities to 12 March 2010 (or such other date as the Company and the Existing Lenders may agree, but not earlier than the repayment date for the New Facility). Repayment of the 2007 Facilities shall be subordinated to repayment of the New Facility. The terms of the 2007 Facilities remain the same in all other respects.
The Directors, other than Mr Lampe who is interested in the transaction (the “Independent Directors”), who have consulted with Canaccord Adams Limited, consider the terms of the New Facility and reissue of warrants to LC to be fair and reasonable insofar as the shareholders of the Company are concerned. In advising the Independent Directors, Canaccord Adams Limited has relied upon their commercial assessment.
Steve Boldy, CEO of Lansdowne commented:
With the markets effectively closed for fundraising it is reassuring to know that we have the continued support of our principal shareholders, that support is much appreciated. Our recently announced updated Competent Persons Report has helped enhance interest in our acreage and farm-out discussions are now our immediate priority.
|Lansdowne Oil & Gas plc|
|Steve Boldy||Chief Executive Officer||+353 1 637 3934|
|Chris Moar||Finance Director||01224 748480|
|John East & Partners Limited|
|David Worlidge||Director||020 7628 2200|
|Johnny Townsend||Director||020 7628 2200|
Lansdowne Oil and Gas plc
Arnhall Business Park
Tel: +44 (0)1224 748480
Fax: +44 (0)1224 748481