Following the appointment of deal maker Chris Brown last month investors in Tomco Energy PLC (LON:TOM) are looking forward to acquisition news.
Tomco’s primary asset to date, an oil shale venture reliant on ground-breaking new technology, was waylaid amid crude’s downturn, and now the group’s newly hired chief executive will look to bring some diversity and near-term impetus.
In Tomco’s financial results statement, released today, the company highlights it is currently carrying out preliminary due diligence on a new opportunity – a palm oil milling project in West Africa.
The AIM-quoted company described the opportunity as having low capex costs and potential for cash flows starting in mid-2017.
It is an opportunity that appears to fit Tomco’s remit.
In today’s statement, the company highlighted: “the directors believe that examining low-cost opportunities with near-term cash flow would be beneficial to the company and its shareholders while the EcoShale In-Capsule demonstration project is progressed.”
Chris Brown, the founder and former managing director of London Mining, is an indirect beneficiary of TomCo’s largest shareholder Kenglo One (which own 23.8%).
He has offered to provide the company with a £150,000 convertible loan and the terms of that arrangement are currently being finalised.
In the meantime, due diligence continues.
“Chris has a mandate from the board to consider the acquisition of assets that will produce positive cash flows for TomCo whilst not being majorly dilutive for existing shareholders,” Tomco said.
“Using these tests, the hydrocarbon and mining sectors have not proved to be fruitful so far, largely due to low commodity prices, TomCo's low market capitalisation, and the high cost of cash generating projects.
“The board has, therefore, decided to widen its scope of interest. For example, it is currently completing preliminary due diligence on a new palm oil milling project in West Africa, further information in relation to this potential project will be provided in due course subject to the successful completion of our assessments.”
In terms of the financial results, the pre-revenue group reported a £207,000 loss for the twelve months to March 31, and ended the period with £102,000 of cash and equivalents.