REG - Coro Energy PLC - Proposed Fundraise, GM Notice & Corporate Update

Coro EnergyAnnouncement

09/01/2025 07:15

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RNS Number : 7288S  Coro Energy PLC  09 January 2025

9 January 2025

 

Coro Energy Plc

("Coro" or the "Company")

 

Proposed Equity Fundraising and Share Capital Reorganisation

Proposed Redemption and Conversion of Bonds

Proposed Convertible Loan Repayment

Notice of General Meeting

Vietnam Monetisation

Corporate Update

 

 

Coro Energy PLC, the South East Asian energy company with a natural gas and
clean energy portfolio, is delighted to announce a proposed recapitalisation
of the business to be implemented by way of an equity fundraising, a share
capital reorganisation and the deemed redemption of part of the Company's
existing secured listed bonds with the balance being converted into equity
("the Recapitalisation").  Once completed, it is proposed that the
convertible loan notes of the Company be repaid in full and accordingly, this
Recapitalisation will position Coro as a corporate debt-free regional clean
energy developer with a blended renewables and gas portfolio.

 

Equity Fundraising and Share Consolidation

 

The Company today announces that it is proposing to raise gross proceeds of
approximately £2 million by way of an equity fundraising of which £1.9
million has already been conditionally committed by investors ("Equity
Fundraising").

 

In addition, the Company is proposing to effect a share capital reorganisation
("Share Capital Reorganisation") of the Company's existing ordinary shares of
0.1 pence each ("Existing Ordinary Shares"). The Company is therefore
proposing to consolidate the Existing Ordinary Shares so that every 100
Existing Ordinary Shares are consolidated into one new ordinary share of 10
pence ("Consolidated Share") and a further sub-division of every Consolidated
Share into one new ordinary share of 0.5 pence each ("New Ordinary Share") and
one new deferred share of 9.5 pence each ("Deferred Shares"). The Share
Capital Reorganisation will reduce the number of ordinary shares in issue from
2,866,858,800 Existing Ordinary Shares to 28,668,588 New Ordinary Shares. The
Share Capital Reorganisation is conditional on approval by shareholders of the
Company at a general meeting which is expected to occur on or before 26
February 2025.

 

The Equity Fundraising comprises:

 

·    a subscription raising gross proceeds of at least £1.9 million
("Subscription") through the issue of New Ordinary Shares ("Subscription
Shares") at 1.5 pence ("Issue Price") per Subscription Share; and

·    a retail offer ("Retail Offer") raising further funds through the
issue of New Ordinary Shares ("Retail Offer Shares") at the Issue Price.

 

The Company has received binding conditional commitments from new investors
and certain existing shareholders in respect of 126,666,667 Subscription
Shares.

 

The Retail Offer will be organised by the Company's broker Hybridan LLP with
one of the retail platforms directly. The Retail Offer will open on Friday
10(th) January. Further details of the Retail Offer will be announced
separately.

 

It is anticipated that the Equity Fundraising will raise gross proceeds of
approximately £2 million and is subject to a minimum amount of £1.9
million.  The Company reserves the right to raise in excess of £2 million
subject to investor demand.

 

The net proceeds of the Equity Fundraising will, if completed and together
with the Group's cash on hand of £0.25 million at 31 December 2024
(unaudited), provide the Company with sufficient funds to repay its existing
convertible loan, continue to develop its pipeline of renewable energy
projects, with a particular focus on its Vietnamese C&I rooftop solar
projects, and to meet ongoing Duyung PSC general and administrative expenses.

 

The Equity Fundraising is conditional, inter alia, on:

 

·    the resolution (to grant the relevant shareholder authorities to
issue New Ordinary Shares pursuant to the Equity Fundraising and the Bond
Proposals and to approve the Share Capital Reorganisation) being proposed at a
general meeting of shareholders of the Company to be held on or before 26
February 2025 ("Shareholder Resolution") being duly passed;

·    the resolutions being proposed at the relevant meetings of
bondholders (as referred to below) to be held on or before 26 February 2025
being duly passed;

·    admission of the Subscription Shares,  the Retail Offer Shares and
the Bond Conversion Shares (as defined below) being admitted to trading on the
AIM market of the London Stock Exchange ("Admission").

 

The Subscription Shares and the Retail Offer Shares will represent
approximately 28% of the enlarged issued share capital following the
completion of the Recapitalisation and Admission.

 

It is expected that completion of the Equity Fundraising and Admission will
occur before the end of February.

 

Should Shareholders not vote in favour of the Shareholder Resolution set out
in the notice of General Meeting, the Board would not be able to proceed with
the Recapitalisation and the Company would be unable to repay the Bonds on
their due date. In these circumstances, in the absence of substantial capital
being provided to the Company in the short term, the Board would likely seek
to cancel the Company's admission to trading on AIM and commence an orderly
winding up of the Company.  In this event it is highly unlikely that
Shareholders would see any return on their current investment.

 

Bond Redemption and Conversion

 

As previously announced on 12 April 2024 the Company was granted a standstill
in respect of the Company's Luxembourg listed EUR 22.5 million 10.0% secured
notes ("Bonds") which were due to mature on 12 April 2024.  The aggregate
amount outstanding under the Bonds (including interest) at today's date is EUR
22.5 million.

 

The Company is intending on or about 13 January 2025 to publish its proposals
in relation to the Bonds ("Bond Proposals") which will comprise:

·    the deemed repayment of 75 % of the principal amount of the Bonds
together will all accrued interest; and

·    the conversion of the balance of principal outstanding under the
Bonds into 311,617,085 New Ordinary Shares ("Bond Conversion Shares") at the
Issue Price.

The Company is proposing that meetings of the holders of the two tranches of
Bonds (the "Bondholders") will be convened on or before 26 February 2025 (the
"Bondholder Meetings").  Bondholders, who hold approximately 68% of the
principal outstanding under the Bonds have signed irrevocable undertakings to
vote in favour of the Bond Proposals at the Bondholder Meetings.

 

The Bond Proposals will be conditional, inter alia, on:

·    the Shareholder Resolution being duly passed;

·    the Bondholders passing the requisite resolutions at the Bondholder
Meetings; and

·    Admission of the Bond Conversion Shares, Subscription Shares and
Retail Offer Shares on the AIM market of the London Stock Exchange.

On completion of the Bond Proposals all the principal and interest outstanding
under the Bonds will be deemed to have been repaid in full of approximately 75
% of the principal and all accrued interest having been effectively written
off and with the balance of the principal being converted into the Bond
Conversion Shares.  The Bond Conversion Shares will represent approximately
66% of the enlarged issued share capital following the completion of the
Recapitalisation and Admission.  As part of the Bond Proposals the
Bondholders will agree not to dispose of any of the Bond Conversion Shares for
a period of six months from the date of Admission.

 

A copy of the circular ("Bondholder Circular") containing the Bond Proposals
which will be sent to Bondholders shortly and once sent, will be available on
the Company's website at www.coroenergyplc.com

 

Convertible Loan Repayment

 

As previously announced on 15 August 2024 and 6 November 2024, the Company has
US$750,000 of convertible loan notes.   Once the Recapitalisation has been
completed it is intended that the amount outstanding (approximately
US$900,000) under the convertible loan notes, including accrued interest, will
be repaid .

 

General Meeting

 

The Company is intending to hold a general meeting ("General Meeting") on or
about 26 February 2025 at which the Shareholder Resolution will be proposed. A
circular ("Shareholder Circular") convening the General Meeting is expected to
be posted to Shareholders on or about [x January 2025] and will be made
available on the Company's website at www.coroenergyplc.com
(http://www.coroenergyplc.com/) .

 

The Company's largest shareholder, River Merchant Capital, has signed an
irrevocable undertaking to vote in favour of all the Shareholder Resolution to
be proposed at the General Meeting.]

 

Vietnam Monetisation

 

As part of its entry into the growing Vietnamese C&I rooftop market, Coro
constructed a 3-megawatt pilot project consisting of over 4,500 solar panels
and other ancillary components that has been installed across four factory
roofs and covers a total area of 16,120 square metres. This project has been
operational since 2022 and delivers electrical power that is being consumed on
site by Phong Phu Corporation, one of Vietnam's premier textile manufacturers
under a 25-year power purchase agreement. Following a competitive bidding
process, the Company is considering divesting this asset to provide funding
for its roll out of the higher margin Mobile World Group contract and to repay
part of the existing loan from its EPC contractor in Vietnam.  Further
information will be announced as appropriate.

 

As previously announced on 10 October 2023, the Company signed a Memorandum of
Understanding ("MoU") in Vietnam with Mobile World Group ("MWG") granting Coro
exclusivity on an initial 900 company sites in the central and southern
regions of Vietnam where solar irradiation is the highest in the country.
Coro will build, own, and operate each rooftop solar system and sell all
generated electricity directly to each Mobile World Investment Corporation
location under a 14-year Power Purchase Agreement, extendable in certain
circumstances. The Power Purchase Agreement ("PPA") was signed on 8 March
2024 and there are 87 sites (circa 3MW) constructed with MWG in Vietnam as of
today's date. Once operational these are expected to generate free cash flows
of approximately US$400,000 per annum.  The Company will continue rolling out
sites following the completion of the transaction.

 

As a developer, having already established a degree of critical mass of MWG
sites, Coro is turning its attention to monetising developed sites, largely to
provide finance for future developments.  Coro's strategy remains to retain
ownership of sites where funding allows and to manage its funding needs
through selling tranches of constructed sites to institutional investors where
necessary. The Company is in discussion with various third parties relating to
the acquisition of existing tranches and will update the market further when
appropriate.

 

The Company also continues discussions, as announced on 18 January 2024, with
HD Bank of Vietnam to provide local debt finance for its rooftop solar
portfolio.

 

Corporate Update

 

The Company continues to develop its utility scale solar and wind projects in
the Philippines where it has already, as previously announced, secured two
100MW wind energy service contracts and a 130 meter tall meteorological mast
has been collecting data since January 2024.  An application for a third
100MW wind energy service contract is targeted for 2025 and the Company is
currently initiating the conceptual design for these 300MW wind power projects
with a view to determine the specific land requirements.  Separately, the
completed pre-feasibility study on the Company's 75MW solar project is
expected shortly and the Company is targeting to apply for its first solar
service contract during Q1 2025.

 

Conrad Asia Energy Limited, the holder of a 76.5% operated interest in the
Duyung Production Sharing Contract in Indonesia, in which the Group has a 15%
interest continues to technically mature the development of the Mako gas field
in preparation for Final Investment Decision. The Company continues to await
the outcome of the farm down process initiated by the Operator where Coro has
drag and tag along rights.

 

As previously announced by the Company on 29 February 2024, the Company
initiated legal proceedings against an Italian contractor in relation to
damages following the historical cessation of production at the Bezzecca field
in Italy.  The next hearing is expected to be 8 May 2025.  Further
announcements will be made as appropriate.

 

 

 

 

 

Tom Richardson, Chairman, commented:

 

"We are delighted to announce the recapitalisation and I would like to thank
our lenders, existing shareholders and new investors for their support to make
this possible.  This plan, if approved, positions the Company as a largely
debt free vehicle with an exciting blend of C&I rooftop solar projects in
Vietnam, utility scale projects in Philippines and a gas development in
Indonesia.  I strongly encourage all shareholders to vote for the resolution
at the forthcoming General Meeting."

 

 

 

 

 

For further information please contact:

 

 Coro Energy plc                                          Via Vigo Consulting Ltd

 Cavendish Capital Markets Limited (Nominated Adviser)    Tel: 44 (0)20 7220 0500

 Adrian Hadden

 Ben Jeynes

 Hybridan LLP (Nominated Broker)                            Tel: 44 (0)20 3764 2341

 Claire Louise Noyce

 Vigo Consulting (IR/PR Advisor)                          Tel: 44 (0)20 7390 0230

 Patrick d'Ancona

 Finlay Thomson

 

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation 596/2014 which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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