Oil and gas company Independent Resources plc (IRG) has confirmed that it is preparing the documentation for an open offer to existing shareholders to raise £1.5mln.
All new shares will be issued at a price of 0.065p.
The company has also recommended bringing in new capital - £650,000 in equity and £1mln via a secured loan.
The news comes as the group is set to relaunch under the name of Echo Energy plc and has announced that Sound Energy PLC (LON:SOU) boss James Parsons will join the company as its new non-executive chairman.
Parsons is to be joined by two other Sound Energy directors, with Marco Fumagalli (Sound non-executive director) and Stephen Whyte (Sound chairman) both appointed to the new board as non-executive directors.
The new funds are being provided by an associate of Continental Investment Partners (an investment group founded by Fumagalli, which also owns 10% of Sound Energy), which with a 29.9% stake will become the cornerstone investor in the company.
The new group under Echo Energy has been touted as the “next Sound”.
Like Sound, IRG has been focussed on project in North Africa and the Mediterranean although it has not had the same kind of access to capital and its progress had stalled.
Parsons said the planned changes establish the "initial platform from which the company will grow very significantly” in terms of hydrocarbon, human and financial resources.
On the open offer, he said: “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.”