Staff laid off, shares suspended at Tower Energy

Tower Resources announced on Friday that it had applied for suspension of trading in the company's ordinary shares on AIM, with effect from 0730 BST, pending clarification of its financial circumstances.

The AIM-traded firm confirmed that it had been in advanced discussions with a potential partner in relation to the company's Thali asset.

“Unfortunately, despite significant time and effort on the part of Tower and the other party, a final deadline for signature of a heads of agreement that would have triggered a non-refundable deposit to Tower, which was set for 11 May 2017, has been missed,” the board explained in its statement.

The company noted in its announcement of 8 September 2016 that the proceeds of the placing and open offer undertaken at that time would provide cash reserves through the first quarter of 2017.

As the Thali transaction had not been concluded, the financial condition and prospects of the company had now deteriorated, leading to “significant uncertainty”.

In order to minimise forward outgoings, current employees had been provided with notice of termination of their employment.

As a result, the board was now considering alternatives for the company - one of which the board said could include the appointment of administrators.

“We are enormously disappointed by this development,” said chairman Jeremy Asher.

“We have twice found ourselves in agreement with technically qualified partners for the Thali license, who have been unable to resolve their own financing contingencies and left us unable to move forward.”

Asher said the executive team had handled the negotiations appropriately, and shareholders and the company’s counterparts at the Societe Nationale des Hydrocarbures in Cameroon had been “patient and supportive”.

“The board does not believe that the company can move forward with the work programme at Thali without a partner.”