Echo Energy Plc (LON:ECHO) has today confirmed the signing for its first institutional funding, with Greenberry Plc agreeing a €20mln loan note subscription.
It follows the corporate relaunch which saw the appointment of Sound Energy executives and the renaming from Independent Resources.
The financing is seen as a precursor to the group’s first proposed acquisition in South America.
Greenberry is at first subscribing for €15mln and it will also have the right to purchase another €5mln notes on the same terms. Loan notes are repayable in five years. The investor will also be granted warrants giving it the option to acquire new shares in the company.
The investor backed the Echo Energy launch, supporting the group with an equity funding that gave it a 27.15% stake in the company.
“Echo continues to make progress in establishing the platform from which it will seek rapid growth towards its ambition of being a mid cap E&P gas player,” said recently appointed Echo chairman James Parsons.
“The company recently announced a Latin American gas strategy hinged on high quality, multi Tcf potential, acreage that will attract majors when the cycle turns.
Parsons added: “As we look to start delivering on that strategy, I am delighted to report signature of the initial tranche of institutional funding which, together with the nil discount equity raise already announced for later this month, will position the company with up to £26M cash.
“We expect to rapidly follow this institutional fundraising by asset acquisitions in our target geography."