Angus Energy secures £1.4m through convertible loan note

The AIM-traded firm said the new loan note was unsecured, and convertible at maturity after two years at the lower of 1p, or if there was an issue of shares or options by way of a single or directly-related offer to the public with an aggregate amount of £0.25m or more made without the approval of the noteholder, then the price attaching to the lowest of those issues.

Alternatively, and at the company's option, the loan note would be repayable in part or whole at any time up to two months before maturity, with an accompanying grant of warrants equal to the face value of the amount repaid.

The warrants were exercisable at the lower of 1.3p or a 30% premium to the conversion price.

Additionally, the firm said it had undertaken not to issue options to directors or staff at an exercise price below 1p during the term of the new loan note.

A proportion of the issue proceeds of the new loan note would be immediately used to repay £0.25m of the outstanding £0.6m of the earlier convertible loan note issued on 24 October, led by Riverfort Global Opportunities PCC, and additionally the terms for conversion of the remaining £0.35m had been altered.

New repayment dates had been set at six equal monthly instalments between 24 May and 24 October 2020 and, if the company chose not to pay an amount on the due date, that amount would become either convertible at any time as per the original terms, or simply repayable at final maturity.

Angus said 15,000,000 warrants had been granted to the noteholders at a strike price of 1p, in exchange for waiving rights under their notes.

Additionally, the company said it had agreed that no further advances would be available for drawdown under the convertible loan note.

“Due to Covid-19, we face an unprecedented situation which makes a variable price and freely convertible instrument exceptionally difficult for the market to price,” said managing director George Lucan.

“For the moment, we are very pleased to have secured £1.4m of new core capital for the company at a time when few can have confidence that equity capital markets will be open for fundraising for the foreseeable future.

“This issuance is not to meet any particular identified cash need but is first and foremost one of prudence with the aim of strengthening the company's capital base ensuring we are able to meet any unforeseen challenges that lie ahead.”

Lucan said the funds would be primarily used to reduce any impact from the Riverfort Global Opportunities PCC facility, now at £0.35m, and to assist and support the broader reconnection programme at the Saltfleetby Gas Field, and the more involved planning process at Balcombe.

“We shall be updating shareholders on the details of recent progress made at all of our sites at the end of April.”

At 0937 BST, shares in Angus Energy were up 27.98% at 0.64p.