Independent Resources has begun to seek shareholder approval for a reorganisation of its share capital which could lead to the company raising equity funding.
The AIM-listed oil company said it wants to reduce the par value of its shares to 0.01 pence, as the current nominal value is 0.10p. Companies are unable to issue shares at below their nominal value.
It is seeking approval to take a “significant statutory authority” to issue up to 5billion new shares for cash, equivalent to 12 times its shares in issue, free of statutory pre-emption rights that they must first be offered to existing shareholders.
Independent said it could be “challenging” to raise new equity funds at a minimum subscription price of 0.1p or more. In addition, the company wants authority for the disapplication of statutory pre-emption rights for the issuance of new ordinary shares.
“The company has identified an opportunity to raise additional equity but the potential providers of this finance have indicated they would not be prepared to provide this funding if it were contingent on subsequent approval of shareholders in general meeting,” Independent Resources said in a statement.
“The directors believe that, in the current difficult environment, this represents a significant opportunity to capitalise the company at an appropriate level, whilst bearing in mind the competing demands of shareholder dilution and the requirement for future certainty in relation to the company’s funding,” Independent Resources said.
The company said it is conducting due diligence on an opportunity in Georgia.
A shareholder meeting is scheduled for April 25 in London.
Recommended for you
Read the latest opinion pieces from our Energy Voice columnists
- Opinion: EY’s Derek Leith on what to expect from the Budget
- Opinion: Carbon capture and storage – put the kettle on
- Opinion: Ensuring effective digital platforms in the energy sector
- Opinion: ‘We woke up to a very new climate reality when Donald Trump won the election’
- Opinion: The digital revolution is here, and oil and gas needs to catch up