Southern Energy Corp (TSX-V:SOU, AIM:SOUC, OTC:MAXMD) has said that, due to strong demand, the size of its recently announced placing in the UK was increased from US$12.5 million to US$13.5 million.
When combined with the US$17.5 million prospectus offering the total size of the offering has increased to US$31.0 million (approximately £25.2 million/C$40.3 million) before expenses.
In a statement, Ian Atkinson, president and CEO of Southern Energy, commented: "We are delighted to provide this update on the UK Placing regarding our previously announced equity financing, which will raise over c. US$31.0 million for the company, providing Southern with a strong balance sheet as we finance the business for further, operationally driven growth."
"This funding will allow us to pursue significant opportunity for accretive acquisitions in our area of expertise and to continue to act nimbly and opportunistically as we execute our growth strategy," he added.
READ: Southern Energy announces plans to raise nearly C$39M to accelerate drilling program at Gwinville in Mississippi
Net proceeds of the offering is to be primarily used to accelerate the initiation of a continuous organic drilling programme at Gwinville, as well as increasing financial flexibility for potential accretive acquisition opportunities. Further drilling at Gwinville is expected to begin in Q4 2022.
The offering is expected to provide additional liquidity to the company's common shares on both AIM and the TSXV.
The underwritten offering is for 26,060,000 common shares at a price of C$0.87 per common share under the prospectus offering (excluding any common shares that may be issued under an over-allotment option) and 20,311,927 new common shares at a price of 54.5p per common share under the UK placing.
Accordingly, in aggregate 46,371,927 new common shares are to be issued under the offering, which represents 51.8% of the existing common share capital of the company prior to the offering.
The prospectus offering is being undertaken on an underwritten bought-deal basis led by Eight Capital, as lead underwriter and sole bookrunner, and included Haywood Securities and Canaccord Genuity (TSX:CF, LSE:CF) and is expected to close on or about July 7, 2022, subject to customary closing conditions, including the approval of the TSX-V.
The UK placing was conducted by Canaccord Genuity (TSX:CF, LSE:CF) and H&P Advisory acting as joint bookrunners. The new common shares issued under the placing and the prospectus offering will be issued credited as fully paid and will rank pari-passu in all respects with each other and the existing common shares from their date of issue.
The placing and the prospectus offering are not inter-conditional (save that the placing is conditional upon the underwriting agreement remaining in force in the period up to placing share admission) and there can be no guarantee that any particular element or elements of the offering will be completed, the company noted.
The securities have not been, and will not be, registered under the US Securities Act or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the US Securities Act and applicable state securities requirements or pursuant to exemptions therefrom.
Southern Energy is a natural gas exploration and production company. It has a primary focus on acquiring and developing conventional natural gas and light oil resources in the southeast Gulf States of Mississippi, Louisiana, and East Texas.
Contact the author at jon.hopkins@proactiveinvestors.com