Coro Energy PLC (AIM:CORO) has unveiled its plan to recapitalise with a £2 million equity raise, a capital reorganisation and a conversion of a portion of its outstanding bonds into shares.
The plan aims to leave the company debt-free, allowing it to focus on growing as a regional clean energy developer.
Net proceeds from the equity raise will be used to repay debts and allow the firm to continue the development of its pipeline of renewable energy projects.
It also supports the company’s admin costs as it continues to retain its interest in the Duyung gas asset in Indonesia.
The capital reorganisation will see 100 existing shares exchanged for one share, followed by a further subdivision - in which each newly issued share would also be split into a new ordinary share and one deferred share. The result will be that the number of Coro ordinary shares in issue will reduce from 2.86 billion to 28.6 million.
Some £1.9 million of the anticipated £2 million equity raise has been conditionally committed to by investors. A sale of shares will be executed via a retail offer using broker Hybridian and a retail share-selling platform.
Coro meanwhile proposes a deal with its bondholders to address an outstanding balance of €22.5 million.
It would see 75% of the bond debt, which has been subject to a ‘standstill’ agreement since April 2024, deemed ‘repaid’ and written off, with the balance of 25% being paid via an equity conversion, giving bondholders new Coro shares.
The net result is that the bondholders would together own the equivalent of 66% of the company, post-restructuring.
Coro also has an outstanding convertible loan, of some $750,000, and the company said the intention is to repay the balance and interest ($900,000 altogether) once the recapitalisation is completed.
Additionally, the company said it is also considering divesting its Vietnamese rooftop solar assets to fund higher-margin projects.
Coro, meanwhile, cautioned that today’s proposals are conditional and require confirmation of approval from both the bondholders and existing Coro shareholders.
It warned that, if approval is not granted, the company “would be unable to repay the bonds on their due date. In these circumstances, in the absence of substantial capital being provided to the company in the short term, the board would likely seek to cancel the company's admission to trading on AIM and commence an orderly winding up of the company.”
It added: “In this event, it is highly unlikely that shareholders would see any return on their current investment.”