Mediterranean Oil & Gas (LON:MOG) shares climbed 14 percent this morning as its shareholders approved plans to reorganise the group’s finances.
The oil and gas junior is raising £20 million by issuing 333.3mln shares at 6 pence each, which will be used to pay off all its bank loans. At the same time £9.8 million of bonds and loan stock will be converted into shares.
The reorganisation leaves Mediterranean debt-free, and provides it with the funds to complete the Guendalina gas field in Italy.
"We are very pleased to have completed this fund raising and restructuring,” chief executive Michael Bonte-Friedheim said.
“Not only does it transform the Company's balance sheet leaving it with no financial debt, but it enables the company to fund its share of the Guendalina gas development project and cover other operational expenses.”
He added: “Guendalina is expected to come on stream in September 2011 and provide the Company with a significant increase in sales revenues and free cash flow.
“We are also delighted to welcome our new directors and investors. Their expertise and experience will be of significant value as we pursue our plans for growth. With their support, all shareholders can look forward with optimism to an exciting future.”