The Sound Energy Plc (LON:SOU) influx into Independent Resources plc (LON:IRG) is a game-changer, according to stockbroker WH Ireland.
It was announced this morning that Sound Energy chief executive James Parsons will be taking up the chairmanship at IRG as part of a relaunch that will see it recapitalised and renamed – as Echo Energy Plc.
IRG is now being backed by an outfit called Greenberry, an associate of Continental Investment Partners which owns just over 10% of Sound.
Parsons is to be joined by two other Sound Energy directors, with Marco Fumagalli (Sound non-executive director and Continental founder) and Stephen Whyte (Sound chairman) both appointed to the new board as non-executive directors.
The ‘new’ company is proposing to bring in new capital - £650,000 in equity and £1mln via a secured loan – as well as a further fund raise is planned, seeking £1.5mln in an open offer to existing shareholders.
Like Sound, IRG has been focussed on projecst in North Africa and the Mediterranean although it has not had the same kind of access to capital and its progress had stalled.
“In our opinion, this is a game-changer for IRG. IRG has suffered years of under-funding and we eagerly await developments,” WH Ireland said in a note.
Earlier, Parsons said: “The changes announced today establish the initial platform from which the company will grow very significantly, in terms of hydrocarbon, human and financial resources,” Parsons said in a statement.
“We will shortly publicly unveil our new strategy, alongside our first growth transaction.
“In the meantime, as part of our ethos of fair treatment to private investors, we would like to invite investors to join us, through the forthcoming open offer, on the same valuation as our cornerstone investor.
“This is a unique opportunity to gain access to a high growth vehicle, led and backed by an experienced and successful team, at the ground floor.”
IRG shares soared more than 400% on Monday, rising 0.285p, to trade at 0.35p per share.