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Roxi Petroleum unveils deal to take control of BNG project

Clive Carver, Roxi chairman, in a statement, said the deal was “long planned” and highlighted that by bringing BNG under its full control the company has removed funding restraints.

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Roxi's stake in BNG rises to 99%

Roxi Petroleum Plc (LON:RXP) has agreed a deal that will see it increase its holding in the BNG assets, in Kazakhstan,  to 99% from 59%.

Through a merger agreement with Baverstock the company is set to take full ownership of what is termed as the Ergon assets – which include the flagship BNG assets.

It will see Roxi issue some 651.4mln new shares to Baverstock, and in a separate arrangement some 80.8mln more new shares will be issued to Kuat Oraziman as conversion of an existing loan. All the new equity will equate to around 43.8% of the enlarged company.

Clive Carver, Roxi chairman, in a statement, said the deal was “long planned” and highlighted that by bringing BNG under its full control the company has removed funding restraints.

“Additionally the capitalisation of some $10 million of debt would not only make the group essentially debt free but also demonstrates the continued belief and commitment of the company’s leading investors to its ultimate success,” he added.

Roxi will relaunch after the deal, under the new name of Caspian Sunrise PLC.

Stockbroker WH Ireland repeated its ‘buy’ recommendation for Roxi, which comes with a 23.3p price target suggesting some 140% upside to the current price of 9.75p.

“The merger, once approved, will increase the pro rata market capitalisation of the company to £158M whilst facilitating progress at BNG by simplifying its ownership structure and consolidating financial and strategic control within Roxi,” the broker said in a note.

Quick facts: Caspian Sunrise

Price: 8.55 GBX

AIM:CASP
Market: AIM
Market Cap: £160.97 m
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