REG - Challenger Energy - Short-term conventional bridge loan

Challenger EnergyAnnouncement

27/10/2023 07:00

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RNS Number : 4525R  Challenger Energy Group PLC  27 October 2023

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation ("MAR")
(EU) No. 596/2014, as incorporated into UK law by the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement, this inside
information is now considered to be in the public domain.

 

27 October 2023

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

 

Short-term conventional bridge loan to fully repay and cancel the

previously advised convertible loan note funding facility

 

Challenger Energy (AIM: CEG) provides the following update in relation to its
financing arrangements:

·    The Company has secured a short-term bridge loan of £346,500 (the
"Bridge Loan"), the proceeds of which will be applied to immediately redeem in
full the drawn and unconverted balance of the previously advised convertible
loan note funding facility (the "Funding Facility"), and thereafter
permanently cancel that Funding Facility.

·    In parallel, the holder of currently issued convertible notes under
the Funding Facility has issued a conversion notice in relation to a small
portion (£55,000) of the notes on issue, which, in accordance with their
terms, will convert by agreement into 100 million new ordinary shares of the
Company ("New Conversion Shares").

·    The net effect will be that the Company will issue the Conversion
Shares, receive £346,500 by way of proceeds from the Bridge Loan, immediately
apply those proceeds to fully redeem the remaining balance of convertible
notes issued under the Funding Facility, and thereafter permanently cancel the
balance of the Funding Facility.

·    Key terms of the Bridge Loan are:

·    a 12% per annum coupon, accruing monthly;

·    a maximum term of 6 months, but with a proviso that the Bridge Loan
will be repaid earlier from proceeds received by the Company from either (i)
completion of the Cory Moruga asset sale transaction in Trinidad, or (ii)
completion of a farm-out of its assets in Uruguay; and

·    the Bridge Loan is unsecured.

·    The Company will issue warrants to the provider of the Bridge Loan,
valid for 36 months, which will entitle the holder of the warrants to
subscribe for 250 million ordinary shares in the Company, at an exercise of
0.1p per share, being a premium of approximately 100% to the current share
price.

 

Eytan Uliel, Chief Executive Officer, said:

"Eight weeks ago, we secured a convertible note funding facility for up to
£3.3 million. As we explained then, our immediate funding requirement was
relatively minimal, in that we were seeking to bridge a short period of time
until receipt of expected cash inflows. We thus drew only a small portion of
that facility, although we saw value in putting a much larger line of funding
in place, in case it was needed it in the future.

However, given the progress in seeing those expected cash inflows in the
required timeframe, we have moved to refinance and cancel the facility, and
replace it with a more "traditional" loan, with attached warrants.

We will thus continue to have the funds needed to bridge us through the
current period, although we will no longer have a bigger facility in place to
support us beyond that. Today's transaction will also mean that the item of
most concern to our shareholders about the previous convertible facility - the
potential for future dilution at unknown value from future conversions and any
future facility draw-downs - is removed."

Admission and Total Voting Rights

·    Application will today be made for admission ("Admission") of the New
Conversion Shares to trading on AIM, which are expected to be admitted on or
about 2 November 2023, and it is expected that on Admission the New Issue
Shares will rank pari passu with the Company's existing ordinary shares.

·    On Admission, the total issued share capital of the Company will
consist of 10,494,066,144 Ordinary Shares. The Company does not hold any
Ordinary Shares in treasury. Therefore, the total number of voting rights in
the Company is 10,494,066,144 and this figure may be used by shareholders in
the Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change in
their interest in, the share capital of the Company under the FCA's Disclosure
Guidance and Transparency Rules.

 

For further information, please contact:

 

 Challenger Energy Group PLC                     Tel: +44 (0) 1624 647 882

 Eytan Uliel, Chief Executive Officer
 WH Ireland - Nomad and Joint Broker             Tel: +44 (0) 20 7220 1666

 Antonio Bossi / Darshan Patel / Isaac Hooper
 Zeus Capital - Joint Broker                     Tel: +44 (0) 20 3829 5000

 Simon Johnson
 Gneiss Energy Limited - Financial Adviser       Tel: +44 (0) 20 3983 9263

 Jon Fitzpatrick / Paul Weidman / Doug Rycroft
 CAMARCO                                           Tel: +44 (0) 20 3757 4980

 Billy Clegg / Hugo Liddy / Sam Morris

 

Notes to Editors

 

Challenger Energy is a Caribbean and Americas focused oil and gas company,
with a range of oil production, development, appraisal, and exploration assets
in the region. The Company's primary assets are located in Uruguay, where the
Company holds high impact offshore exploration licences, and in Trinidad and
Tobago, where the Company has a number of producing fields and earlier-stage
exploration / appraisal projects.

 

Challenger Energy is quoted on the AIM market of the London Stock Exchange.

 

https://www.cegplc.com (https://www.cegplc.com/)

 

ENDS

 

 

 

 

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