Ascent Resources PLC - Posting of circular
("Ascent" or the "Company")
Posting of Circular
0207 251 4905
WH Ireland, Nominated Adviser & Broker
0207 220 1666
SP Angel, Joint Broker
0203 470 0470
Ascent is in a phase of re-focusing its business to positive production growth including reviewing opportunities outside
Significant production growth at the Petišovci field in
In order to progress matters in
The restructuring of the share capital of the Company and the granting to the Directors of the authority to allot additional share capital, which will allow new capital to be raised by way of the Placing, is fundamental to the future prospects of the Company.
If the Placing Resolutions are not passed in full, the Board doubts the ability of the Company to continue as a going concern.
2. The Petišovci project
Ascent holds a 75% interest in the Petišovci gas field in
The Company has been producing from the field since 2017, with the majority of production being exported to
The proper development of the field has been delayed by the permitting process in
The Company is also progressing with a claim for damages for the significantly prolonged process and what the Board have been advised is a manifestly wrong decision.
4. Change of Directors and Management Reorganisation
Ascent will appoint
Ascent will also appoint
5. Capital Reorganisation
The Company's Ordinary Shares are currently trading at below nominal value. The Company is not permitted by law to issue shares at an issue price below their nominal value.
Furthermore, a consequence of having a very large number of shares in issue, with a very low market share price, is that small share trades can result in large percentage movements in the market share price which results in considerable share price volatility. The Board also believes that the bid-offer spread on shares priced at low absolute levels can be disproportionate to the market share price, to the detriment of Shareholders.
The Directors propose, therefore that the Company effects the Capital Reorganisation on the basis that:
a. the Existing Ordinary Shares of
i. one Redenominated Ordinary Share (being an ordinary share in the capital of the Company with a nominal value of
ii. one Deferred Share (being a deferred share in the capital of the Company with a nominal value of
b. the Redenominated Ordinary Shares of
Where the Capital Reorganisation results in any Shareholder being entitled to a fraction of a New Ordinary Share, such fraction shall be aggregated and the Directors intend to sell (or appoint another person to sell) such aggregated fractions in the market and retain the net proceeds for the benefit of the Company.
The Deferred Shares will not be admitted to trading on AIM (or any other investment exchange). The Deferred Shares will have limited rights, and will be subject to the restrictions, as set out in the Company's New Articles, proposed to be adopted at the General Meeting, and as summarised below.
The Deferred Shares will not be transferable. The holders of the Deferred Shares shall not, by virtue or in respect of their holdings of Deferred Shares, have the right to receive notice of any general meeting of the Company or the right to attend, speak or vote at any such general meeting.
The Deferred Shares will not entitle their holders to receive any dividend or other distribution. The Deferred Shares will on a return of assets in a winding up entitle the holder only to the repayment of
The Company will have irrevocable authority at any time to appoint any person to execute on behalf of the holders of the Deferred Shares a transfer thereof and/or an agreement to the transfer of the same to such person as the Company may determine or as the Company determines as custodian thereof, without making any payment to the holders thereof, and/or consent to cancel the same (in accordance with the provisions of the Act) without making any payment to or obtaining the sanction of the holders thereof. The Company may, at its option at any time, purchase all or any of the Deferred Shares then in issue, at a price not exceeding
The Articles have been amended, inter alia, to reflect the creation of the Deferred Shares and to set out the rights attaching to them and, accordingly, Resolution 7 seeks approval to adopt the New Articles of the Company reflecting, inter alia, these changes.
No share certificates will be in issued in respect of the Deferred Shares. Existing share certificates will remain valid for the Redenominated Ordinary Shares. New share certificates will be issued for the New Ordinary Shares.
The New Ordinary Shares will be freely transferable, and application will be made for the New Ordinary Shares to be admitted to trading on AIM. The record date for the Capital Reorganisation is
The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares.
One consequence of the Capital Reorganisation is that Shareholders holding fewer than 100 Existing Ordinary Shares will receive no New Ordinary Shares, they will, however, receive Deferred Shares. Any Shareholder holding fewer than 100 Existing Ordinary Shares may request the cash equivalent of such Existing Ordinary Shares by contacting
To fund the Company while it pursues these opportunities, the Board has conditionally raised
The Placing will be completed by way of subscription letters between the Company and the relevant placees, and will be conditional on the passing of the Placing Resolutions at the General Meeting. Shareholders will have their proportionate shareholdings in the Company diluted by approximately 35 per cent. as a result of the Placing, assuming that no further shares are issued after the date of this document.
7. Authority to allot shares and disapplication of pre-emption rights
The Directors are seeking a general authority, in addition to the authority in relation to the Placing, to allot new shares, free of pre-emption rights and without further recourse to shareholders, which is above the level recommended by the relevant corporate guidelines. The significantly higher level being sought is due to (i) the relatively low market capitalisation of the Company at the current time and (ii) the level of funding required by the Company in the medium term in order to execute on the stated strategy of securing additional assets outside of
This authority is essential to enable to new Board of Directors to capitalise in a timely fashion on attractive opportunities to execute on the stated strategy of diversifying its asset base.
8. Settlement and dealings
Application will be made to the
9. General Meeting
Set out at the end of this document is a notice convening a General Meeting of the Company to be held at
The Resolutions may be summarised as follows:
a. Resolutions 1 and 2 approve the Subdivision of the entire issued share capital of the Company into Redenominated Ordinary Shares and Deferred Shares, together with the Consolidation of the Redenominated Shares into New Ordinary Shares on the basis of 100 Redenominated Shares for every 1 New Ordinary Share;
b. Resolutions 3 and 5 seek authority to allot and issue the Placing Shares free of any pre-emption rights;
c. Resolutions 4 and 6 seek a significantly increased general authority to allot and issue shares free of pre-emption rights, representing approximately 100% of the share capital of the Company immediately following the Capital Reorganisation and the Placing; and
d. Resolution 7 approves the adoption of the New Articles.
10. Action to be taken in respect of the General Meeting
Please check that you have received the following with this document:
· a Form of Proxy for use in respect of the General Meeting; and
· a reply-paid envelope for use in connection with the return of the Form of Proxy (in the
Whether or not you propose to attend the General Meeting in person, you are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post at
This will enable your vote to be counted at the General Meeting in the event of your absence. The completion and return of the Form of Proxy will not prevent you from attending and voting at the General Meeting, or any adjournment thereof.
The restructuring of the share capital of the Company and the granting to the Directors of the authority to allot additional share capital, which will allow new capital to be raised, is fundamental to the future prospects of the Company. If the Placing Resolutions are not passed in full, the Board doubts the ability of the Company to continue as a going concern.
The Directors intend to vote in favour of the Resolutions in respect of their aggregate shareholdings of 2,570,370 Ordinary Shares representing approximately 0.09 per cent. of the Company's Existing Issued Share Capital.
This information is provided by RNS, the news service of the
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