Canadian Overseas Petroleum Limited (LSE:COPL, CSE:XOP, OTC:VELXF) told investors it has requested exemptions under Canadian Securities Exchange (CSE) rules, which could result in the company being exempt from holding a shareholder vote to approve its recently announced equity issue.
The funding, announced on 29 December, would see the company raise $2.5 million of new equity which is intended to act as working capital – some 1.31 billion new shares would be issued, priced at 0.15p each, to Anavio Capital Partners.
It would see share warrants also issued to the investor. Alongside the investment agreement, the company also agreed amendments to its bond terms and entered into a forbearance agreement with its senior lender. COPL also appointed a chief restructuring officer.
Today, in a stock market statement, COPL told investors: “The company under Policy 4 of the CSE, is required to hold a security holder vote on the offering due to the offering including a number of issuable securities that is more than 100% of the currently outstanding securities, unless the company qualifies for exemptions under Policy 4.
“The company satisfies the majority of these requirements for an exemption as the company is in serious financial difficulty, the company has reached an agreement to complete the offering and the independent directors of the board of directors have determined that the offering is in the best interests of the company, is reasonable in the circumstances and that it is not feasible to obtain security holder approval or complete a rights offering to existing security holders on the same terms as the offering.
“The company is, however, requesting an exemption from the application of Policy 4 as a 'Related Person', as defined therein, is participating in the offering and from the requirement to issue a news release five days in advance of the Offering, with the scheduled closing of the Offering being early next week.
“The company is requesting these exemptions from Policy 4 on the basis of the serious financial difficulty facing the company at this time, as outlined in previous news releases and public disclosure.”
COPL earlier this month issued a letter to shareholders in response to queries regarding its agreements with Anavio.