Westmount Energy Limited (AIM:WTE, OTCQB:WMELF) told investors it intends to participate in a return of capital (ROC) transaction proposed by Cataleya Energy Corporation (CEC), in which the AIM-quoted firm holds a 5.28% interest, to reorganise its capital through returns to shareholders.
CEC intends to reduce its shares in issue by 16%, at the same time as it is being funded through an issue of incremental loan notes.
The company, in a statement, told investors that the transaction has been structured such that each participating CEC shareholder effectively receives an amount equal to approximately USD$3.906 per share. In aggregate CEC expects to return US$6.72mln.
Westmount expects its 5.28% stake will reduce to 5.26% as a result of the transaction and it will receive US$355,954 in proceeds.
"We are very encouraged to see new investment into CEC reflecting confidence that a resumption of drilling on the Kaieteur Block will occur post the October 2023 elective nomination date,” said executive chair Gerard Walsh.
“It is also heartening to see that this ROC transaction is being executed without tapping CEC's existing cash balances, thereby allowing CEC to remain very well financed via cash and multiple well carries for future drilling activity."