REG - i3 Energy PLC - Reduction of Share Capital

I3 EnergyAnnouncement

26/03/2024 07:15

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RNS Number : 3002I  i3 Energy PLC  26 March 2024

26 March 2024

i3 Energy plc

("i3", "i3 Energy", or the "Company")

Reduction of Share Capital

i3 Energy PLC (AIM:I3E) (TSX:ITE), an independent oil and gas company with
assets and operations in the UK and Canada, today announces that its Notice
of General Meeting (the "Circular") was posted to Shareholders yesterday. The
Circular contains details of a proposed reduction of capital (the "Capital
Reduction"), being undertaken to ensure there are sufficient distributable
reserves to facilitate dividend payments in the long term. This Capital
Reduction process is not required to facilitate the payment of the next
quarterly dividend.

Terms used in this announcement have the same meaning given to them in the
Circular.

Notice of General Meeting, as determined by the Companies Act 2006 in the UK
(considered a Notice of Special Meeting for the purposes of Canadian
securities laws, as determined in accordance with National Instrument 54-101 -
Communication with Beneficial Owners of Securities of a Reporting Issuer) ("NI
54-101") and referred to as a General Meeting throughout this Document.

The Circular, which was posted to Shareholders yesterday, is available on the
Company's website at https://i3.energy (https://i3.energy) . The Circular will
also be filed under the Company's profile on SEDAR+ at www.sedarplus.ca.

The General Meeting ("GM") is to be held at the offices of W H Ireland
Limited at 24 Martin Lane, London, EC4R 0DR at 11 a.m. (BST) on 15 April
2024. The General Meeting will be a "special meeting" for the purposes of NI
54-101.

Shareholders are strongly encouraged to appoint the Chair of the meeting as
their proxy for the GM. This will ensure that your vote will be counted even
if attendance at the GM is restricted or you are unable to attend.
Shareholders should refer to the Circular for detailed instructions as to how
they may submit their proxy for the GM.

The results of the votes on the resolution proposed at the GM will be
announced as soon as practicable after the conclusion of the GM and will be
available on the Company's website.

Proposed Capital Reduction

As outlined in our RNS issued on 11 March 2024, the Board considers it highly
desirable that the Company has the maximum flexibility to continue the payment
of dividends in line with its dividend policy and otherwise to return value to
Shareholders. The capacity of a UK company to make distributions is restricted
by the sufficiency of distributable reserves. The Board considers that it is
to the benefit of shareholders that the significant value in the Group is
reflected in the parent company balance sheet and is represented by
distributable profits to facilitate a sustainable dividend policy.

The Company has transitioned to UK-IFRS in its parent company accounts for the
year ended 31 December 2023, which is the same reporting framework applied in
its consolidated Group accounts. Under the transitional provisions of UK-IFRS,
the Company has restated its investment in i3 Canada to fair value as at the
date of transition, and this remeasurement has given rise to a reserve in
equity, being the Transition Reserve. The Transition Reserve is an unrealised
profit and, as such, does not form part of the Company's distributable
reserves.

The adoption of UK-IFRS in the Company's standalone accounts has no impact on
the consolidated financial statements of the Group.

It is therefore proposed that:

a.   the amount standing to the credit of the Transition Reserve of
£148,517,000 is capitalised by way of a bonus issue of newly created Capital
Reduction Shares with a nominal value of £0.0001 and share premium of
approximately £0.1234 on each share;

b.   the newly created Capital Reduction Shares are cancelled by way of a
Court-approved reduction of capital; and

c.   £148,396,755, being the amount standing to the credit of the Company's
Share Premium account following the Capital Reduction Bonus Issue be
cancelled.

This is expected to create distributable reserves in the Company to facilitate
the future payment of dividends (in cash or otherwise) to Shareholders, where
justified by the profits of the Company, or to allow the redemption or
buy-back of the Company's shares (or other distributions to Shareholders).

If the proposed Capital Reduction is approved by Shareholders at the General
Meeting, it will be subject to the scrutiny of, and confirmation by, the Court
which will take due account of the protection of creditors and, subject to
that confirmation and registration by the Registrar of Companies in England
and Wales of the order of the Court, is expected to take effect by the end of
May 2024.

The Board anticipates that this will result in the creation of distributable
reserves; however, this is subject to: (i) there being no materially negative
change in the financial position or prospects of the Company; and (ii) any
provision that the Court requires the Company to make for the protection of
its creditors (although the Board does not expect any undertakings or similar
measures to be required). This will give the Company the maximum flexibility
to consider the payment of dividends and otherwise return value to
Shareholders, should the Board consider it appropriate.  It should however be
noted that if the Company is required to give undertakings to the Court, this
may delay the Company's ability to pay dividends and otherwise return value to
Shareholders.

There will be no change in the number of Ordinary Shares in issue (or their
nominal value) following the implementation of the Capital Reduction and no
new share certificates will be issued as a result of the Capital Reduction.
The Capital Reduction itself will not involve any distribution or repayment of
capital or share premium by the Company and will not reduce the underlying net
assets of the Company. The distributable reserves arising on the Capital
Reduction will, subject to the discharge of any undertakings required by the
Court, support the Company's ability to pay dividends, should circumstances in
the future make it desirable to do so.

 

Timetable of Principal Events

The expected timetable of principal events with respect to the Capital
Reduction are as follows (more precise dates will be announced following the
conclusion of the GM):

 PRINCIPAL EVENT                                                                 TIME AND DATE
 Annual General Meeting                                                          11 a.m. (BST) on 15 April 2024
 Expected date for the directions hearing for the Court to consider the Capital  In or around April 2024
 Reduction application
 Expected date for the hearing by the Court to confirm the Capital Reduction     In or around May 2024
 Expected date that the Capital Reduction becomes effective                      The Business Day immediately after the Court order confirming the Capital
                                                                                 Reduction

 

Notes

1.     The times and dates set out in this timetable and throughout this
Document that fall after the date of publication of this Document are based on
the Company's current expectations and are subject to change. The times and
dates are indicative only and will depend, among other things, on the date
upon which the Court confirms the Capital Reduction. The provisional final
hearing date is subject to change and dependent on the Court's timetable.

2.     The timetable assumes that there is no adjournment or postponement
of the General Meeting. If the scheduled date for the General Meeting changes,
the revised date and/or time will be notified to Shareholders by an
announcement made by the Company through a RIS.

3.     References in this Document are to London times unless otherwise
stated.

Enquiries:

 i3 Energy plc                                   c/o Camarco

 Majid Shafiq (CEO)                              Tel: +44 (0) 203 757 4980

 WH Ireland Limited (Nomad and Joint Broker)

 James Joyce, Darshan Patel, Isaac Hooper        Tel: +44 (0) 207 220 1666

 Tennyson Securities (Joint Broker)

 Peter Krens                                     Tel: +44 (0) 207 186 9030

 Stifel Nicolaus Europe Limited (Joint Broker)

 Ashton Clanfield, Callum Stewart                Tel: +44 (0) 20 7710 7600

 Camarco

 Andrew Turner, Violet Wilson, Sam Morris        Tel: +44 (0) 203 757 4980

 Notes to Editors:

i3 Energy is an oil and gas Company with a low cost, diversified, growing
production base in Canada's most prolific hydrocarbon region, the Western
Canadian Sedimentary Basin and appraisal assets in the North Sea with
significant upside.

The Company is well positioned to deliver future growth through the
optimisation of its existing high working interest asset base and the
acquisition of long life, low decline conventional production assets.

i3 is dedicated to responsible corporate practices and the environment, and
places high value on adhering to strong Environmental, Social and Governance
("ESG") practices. i3 is proud of its performance to date as a responsible
steward of the environment, people, and capital management. The Company is
committed to maintaining an ESG strategy, which has broader implications for
long-term value creation, as these benefits extend beyond regulatory
requirements.

i3 Energy is listed on the AIM market of the London Stock Exchange under the
symbol I3E and on the Toronto Stock Exchange under the symbol ITE. For
further information on i3 Energy please visit  https://i3.energy/
(https://i3.energy/) .

Cautionary Statements Regarding Forward Looking Information

Certain statements and information contained in this announcement and other
continuous disclosure documents of the Company referenced herein, including
statements and information that contain words such as "could", "should",
"can", "anticipate", "expect", "believe", "will", "may", "continue",
"proposed" and similar expressions relating to matters that are not historical
facts, constitute "forward-looking information" within the meaning of
applicable Canadian securities legislation. These statements and information
involve known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in
such forward-looking statements and information. The Company believes the
expectations reflected in such forward-looking statements and information are
reasonable, but no assurance can be given that these expectations will prove
to be correct. Such forward-looking statements and information included in
this announcement should not be unduly relied upon. These forward-looking
statements and information speak only as of the date of this announcement.

In particular, forward-looking information and statements in this announcement
include, but are not limited to the following:

•     the expected timing of the Circular and of the results of the
Company's GM;

•     the anticipated benefits of the Capital Reduction;

•     expectations regarding proceedings before the Court in respect of
the Capital Reduction, including the timing of any required approvals; and

•     the Company's expectations regarding its ability to create and
increase distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where justified
by the profits of the Company, or to allow the redemption or buy-back of the
Company's shares (or other distributions to Shareholders).

The forward-looking information and statements made in this announcement rely
on certain expected economic conditions and overall demand for the Company's
services and are based on certain assumptions. The assumptions used to
generate this forward-looking information and statements are, among other
things, that:

•     the Company will maintain its financial position and financial
resources will continue to be available to the Company;

•     demand for the Company's products and services will remain
consistent;

•     there will not be significant changes in the Company's financial
position due to pricing changes driven by market conditions, competition,
regulatory factors or other unforeseen factors; and

•     the Company will obtain requisite approvals required to realize
the perceived benefits of the Capital Reduction.

Risks and other uncertainties that could cause actual results to differ
materially from those anticipated in such forward-looking statements include,
but are not limited to: political and economic conditions; industry
competition;  price fluctuations for oil and natural gas and related products
and services; the availability of future debt and equity financing; changes in
laws or regulations, including taxation and environmental regulations which
may adversely impact the Company; extreme or unsettled weather patterns; and
fluctuations in foreign exchange or interest rates.

Readers are cautioned that the foregoing factors are not exhaustive.
Additional information on these and other factors that could affect the
Company's operations and financial results is included in reports filed on the
Company's website. The forward-looking statements and information contained in
this announcement are expressly qualified by this cautionary statement. The
Company does not undertake any obligation to publicly update or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities laws.

 

 

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