Corcel PLC (LSE:CRCL) shares surged over 23% higher in Monday’s early deals as the company confirmed it has secured a £10 million loan note financing agreement.
Extraction Srl, an investment company in which Corcel chair Antoine Karam is a shareholder, will initially make £1 million available in October followed by £1 million in January, while the other £8 million is potentially available over the three-year term of the agreement.
The company, in a statement, said the loans will carry interest at 12% and will be convertible to equity at a 79.8% premium to Corcel’s closing price on Friday 15 September.
Corcel highlighted that the facility provides short and longer-term funding for ongoing operations in Angola and business development in Brazil and elsewhere.
“[The agreement] will enable the company to more rapidly drive value creation for shareholders and, equally importantly, is demonstrative of the changes occurring in the business both operationally in Angola and financially in the nature of the funding being utilized,” said executive chair Karam.
“With this instrument in place, the company now has a cost-effective long-term facility it can access without having to consider more dilutive and expensive sources of capital on offer.
“With this facility now available to help accelerate our activities, we now await initial results from the drilling of our first oil well in the Kwanza Basin, Angola."
Shares jumped 23.6% to 0.55p.