REG - Sound Energy PLC - Sale of SEML & Relinquishment of Exploration Right

Sound EnergyAnnouncement

26/05/2026 07:20

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RNS Number : 6824F  Sound Energy PLC  26 May 2026

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

26 May 2026

 

Sound Energy PLC

 

("Sound Energy", the "Company" and together with its subsidiary undertakings
the "Group")

 

Conditional Sale of Sound Energy Meridja Limited and Relinquishment of Arran
Energy's Exploration Interests

Publication of Eurobond Restructuring Proposals

 

Sound Energy PLC (AIM:SOU), the AIM quoted transition energy company,
announces it has entered into a binding Sale and Purchase Agreement (the
"SPA") for the divestment of the Company's interests in the Tendrara
Exploitation Concession (20%), onshore Morocco, by way of the disposal of the
entire share capital of Sound Energy Merijda Limited ("SEML") to Managem SA
("Managem"). The Company will receive aggregate proceeds of US$57 million
(subject to working capital adjustments) comprising a nominal consideration of
one USD for the shares in SEML together with the repayment of shareholder
loans advanced by the Company to SEML.

 

In addition, the Company announces the relinquishment of its 27.5% interest in
the Anoual Exploration Permit and the waiving of any subsisting rights in the
Grand Tendrara Exploration Permit. A proposal for the early redemption of its
outstanding Eurobonds is also announced; using the proceeds from the disposal
of SEML to repurchase the EUR 28.8 million 5.0% Senior Secured Notes (the
"Notes") and strengthen the Company's balance sheet.

 

Highlights

§ Sound Energy's sale of SEML to Managem marks an exit from its long-standing
involvement in the Tendrara onshore gas development project;

§ Relinquishment of the Company's 27.5% non-operated interest in the Anoual
Exploration Permit;

§ Waiving of any subsisting rights in the Grand Tendrara Exploration Permit;

§ Proposed Eurobond restructuring to repurchase the Notes prior to their
December 2027 redemption date offers an opportunity to pay down corporate debt
and strengthen the Company's balance sheet;

§ The redemption of the Eurobonds is conditional on the completion of the
sale of SEML, which inter alia is conditional on shareholder approval;

§ Post the elimination of balance sheet debt and assuming the transaction
completes on 31 July 2026 the Company is expected to be left with a cash
balance of USD 11 million;

§ A debt free balance sheet will enable the Company to pursue new ventures
within the energy transition space and upstream hydrocarbon opportunities
outside of Morocco.

 

Background and Rationale for the Sale of SEML

 

On 12 June 2024 Sound Energy announced that the Company had farmed out a 55%
operating interest in the Tendrara Exploitation Permit to Managem with the
development of the concession being split into two distinct phases:

 

§ Phase I: A micro-LNG (mLNG) development for gross 54 Bcf of gas with a
10-year "take or pay" contractual agreement with Afriquia Gaz for gross
production of 10 mmscfd;

§ Phase II: A 120 km pipeline development for an additional gross 128 Bcf of
gas via a Gas Sales Agreement (GSA) with ONEE.

 

Notwithstanding the material progress that the Operator, Mana Energy Ltd
(55%), a wholly owned subsidiary of Managem, has made with respect to Phase I
of the development, including conversion of the ItalFluid Geoenergy S.r.l
("ItalFluid") contract from a vendor financing contract to a traditional
Engineering, Procurement and Construction (EPC) contract, the timetable for
first gas has evolved as the project has progressed through the construction
and commissioning phase. First gas from the project, originally anticipated in
October 2025, is now expected in Q3 2026. During this period the project has
also experienced broader industry inflationary pressures affecting both
capital and operational expenditure and the Final Investment Decision (FID) on
Phase II of the development remains subject to further evaluation by the joint
venture partners.

 

Against this backdrop, and following a strategic review of its portfolio and
capital allocation priorities, the Board of Sound Energy concluded that the
proposed sale of SEML, together with the Company's exit from the Anoual and
Grand Tendrara exploration permits, represents an attractive opportunity to
realise value from the Company's Moroccan exploration and production portfolio
while significantly reducing future funding requirements and allowing the
Company to focus on its next phase of growth, including energy transition
opportunities in Morocco and internationally.

 

Proceeds from the sale of SEML facilitates the elimination of the Company's
balance sheet debt and re-positions Sound Energy as a debt free company in the
energy transition space, better able to access the equity and debt capital
markets to pursue cash generative deals in the renewables energy sector and
hydrocarbon production opportunities outside of Morocco.

 

Should the deal complete on 31 July 2026, it is anticipated that post
repayment of all its debts, the Company will have a cash balance of $11
million.

 

Details of the Disposal of SEML

 

Sound Energy has entered into a binding SPA with Managem for the sale of the
Company's remaining 20% interest in the Tendrara Exploitation Concession,
through the acquisition of the entire share capital of SEML. The Company will
receive aggregate proceeds of US$57 million (subject to working capital
adjustments) comprising a nominal consideration of one USD for the shares in
SEML together with the repayment of shareholder loans advanced by the Company
to SEML. Following completion of the transaction, Managem and its affiliates,
will hold a 75% operated interest in the Tendrara Exploitation Concession with
the remaining 25% interest being held by ONHYM.

 

As part of Sound Energy's revised strategic orientation, Sound Energy's wholly
owned subsidiary, Arran Energy Holdings Limited ("AEHL)", will relinquish its
27.5% non-operating interest in the Anoual Exploration Permit and, following
the expiry of the Grand Tendrara Exploration Permit on 30 September 2024,
waive any rights in connection with the Grand Tendrara Exploration Permit.

 

The Company has provided customary warranties and undertakings to Managem and,
whilst the terms of the SPA are binding on the parties, the SPA remains
conditional inter alia upon the following key provisions:

§ Notification to the Moroccan Minister of Energy and the absence of receipt
of a refusal or objection from the Moroccan Minister of Energy by not later
than the date of satisfaction of the last of the other conditions precedent;

§ Receipt of the written authorisation of the Foreign Exchange Office (Office
des Changes) relating to Managem's payment obligations and all necessary
antitrust clearances, as applicable, have been obtained;

§ No Material Adverse Change has occurred;

§ The despatch by the Seller to its shareholders of a circular seeking the
consent of its shareholders to the transaction for the purposes of Rule 15 of
the AIM Rules and the passing, at a duly convened general meeting of the
Seller, of the resolutions in the form set out in such circular; and

§ The approval of Managem's board of directors.

If the conditions precedent are not satisfied or waived within three (3)
months from the Signature Date or such later date as the Parties may agree in
writing (the "Longstop Date"), then the Longstop Date shall be automatically
extended by a period of one (1) month.   If the conditions precedent are not
satisfied or waived by the Longstop Date as so extended, then the SPA shall
terminate.

 

The loss attributable to the assets being disposed in the year ended 31
December 2025 was approximately £1.0 million.

 

About Managem

Managem SA is an international mining group, listed on the Casablanca Stock
Exchange (CSE), with resolutely African roots, with a presence in seven
countries across the continent. Initially present in metals such as cobalt,
copper and zinc, it has since diversified into precious metals, with silver
and gold. Today, Managem employs 5,000 people of 28 nationalities in 13 mining
operations and 20 industrial units, all on the African continent.

 

Mana Energy Limited, a wholly owned subsidiary of Managem, is the Operator of
the Tendrara Exploitation Concession (55%) and Operator of the Anoual
Exploration Permits (47.5%) onshore Morocco.

 

AIM Rule 15 and Shareholder Approvals

In view of the relative size of the disposal of SEML to the Company, the
disposal is deemed to result in a fundamental change of the business of the
Company for the purpose of Rule 15 of the AIM Rules and it is therefore
conditional upon the approval of Shareholders.

 

Accordingly, a circular convening a General Meeting of Shareholders for the
approval of the proposed transaction will be posted to shareholders within the
coming days.  As the disposal will result in the Company divesting of all, or
substantially all, of its existing trading business, activities and assets,
the Company will be deemed to become an AIM Rule 15 Cash Shell, following
Completion of the disposal and will be required to make an acquisition or
acquisitions which constitutes a reverse takeover under AIM Rule 14 within six
months of completion.

 

In the event the Company does not complete a reverse takeover under AIM Rule
14 within such six-month period or seek readmission to trading on AIM as an
investing company pursuant to Aim Rule 8, the Company's ordinary shares would
be suspended from trading pursuant to AIM Rule 40. Thereafter, if such a
transaction has not been completed within a further six-month period,
admission to trading on AIM of the Company's ordinary shares would be
cancelled.

 

Eurobond Restructuring Proposals

The Company also announces that following discussions with certain holders of
the Company's Luxembourg listed EUR 28.8 million 5.0% senior secured notes due
December 2027 (the "Notes") and the receipt of irrevocable undertakings
representing 30% of the Notes with respect to the amendment conditions
outlined below, the Company intends to convene a Meeting of Noteholders and
will accordingly publish a Consent Solicitation Memorandum with its proposal
(the "Proposal") in respect of a restructuring of the Notes within the coming
days.

 

Pursuant to the Proposal, the Company is seeking the consent of the
Noteholders to:

 

·      Amend Condition 7.2A (Special Redemption at the Option of the
Issuer) such that an Initial Redemption Purchase Price of EUR 58,860.21 per
EUR 100,000 of principal amount of Notes is set with effect from the
implementation of the amendments up to (and including)1 July 2026;

 

·      For the redemption of Notes occurring after 1 July 2026, the
purchase price will be the Initial Redemption Purchase Price, plus an
additional EUR 857.19 per EUR 100,000 of principal amount of Notes for each
subsequent calendar month, calculated on a pro rata basis within the relevant
calendar month;

 

·      No amount of accrued Deferred Interest to the date of redemption
will be payable in relation to a redemption under this Condition 7.2A and, for
the avoidance of doubt, at the date of redemption the payment of such amounts
of accrued Deferred Interest to the date of redemption shall be deemed waived
by the Noteholders.

 

Subject to approval of the Proposal by the Noteholders and upon completion of
the sale of SEML to Managem, or its affiliate, the redemption of the Notes
pursuant to the amended Condition 7.2A (Special Redemption at the Option of
the Issuer) shall be mandatory for the Company and the proceeds of the
disposal will be used to redeem the outstanding Notes in accordance with the
amendment conditions above.

 

A copy of the Consent Solicitation Memorandum will be sent to Noteholders in
the coming days setting out the timetable for the proposed restructuring and
will be available on the Company's website at www.soundenergyplc.com
(http://www.soundenergyplc.com/) .

 

Majid Shafiq, Chief Executive Officer, commented:

"This transaction represents a transformational milestone for Sound Energy.
Following many years of involvement in the Tendrara project, the sale of our
remaining interest in Tendrara to Managem accelerates the crystallisation of
significant value for shareholders, while also reducing the Company's exposure
to the future funding requirements of the larger Phase II development, and
enables the Company to reallocate capital and management focus towards its
next phase of growth and strategic priorities.  The proposed repayment of our
Eurobonds will allow Sound Energy to emerge debt free and repair a capital
structure which is no longer appropriate for a company of Sound Energy's size
and stage of development. The existing debt burden has materially constrained
the Company's strategic flexibility and limited its ability to engage credibly
with both potential financing partners and industry counterparties. The
transaction provides the financial flexibility to pursue a renewed growth
strategy focused on energy transition opportunities, including renewable
energy developments in Morocco and selected upstream production opportunities
internationally. We would like to thank our partners, shareholders,
bondholders and the Moroccan authorities for their continued support and we
look forward to positioning Sound Energy for its next phase of growth."

 

IMPORTANT NOTICE

This announcement does not constitute or form part of any offer or invitation
to purchase, or otherwise acquire, subscribe for, sell, otherwise dispose of
or issue, or any solicitation of any offer to sell, otherwise dispose of,
issue, purchase, otherwise acquire or subscribe for, any security in the
capital of the Company in any jurisdiction.

 

The information contained in this announcement is not to be released,
published, distributed or transmitted by any means or media, directly or
indirectly, in whole or in part, in or into the United States or to any US
Person. This announcement does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in the United States or to any US
Person. Securities may not be offered or sold in the United States absent: (i)
registration under the Securities Act; or (ii) an available exemption from
registration under the Securities Act. The securities mentioned herein have
not been, and will not be, registered under the Securities Act and will not be
offered to the public in the United States.

 

This announcement does not constitute an offer to buy or to subscribe for, or
the solicitation of an offer to buy or subscribe for, Ordinary Shares in the
capital of the Company or any other security in any jurisdiction in which such
offer or solicitation is unlawful. The securities mentioned herein have not
been, and the Ordinary Shares will not be, qualified for sale under the laws
of any of Canada, Australia, the Republic of South Africa or Japan and may not
be offered or sold in Canada, Australia, the Republic of South Africa or Japan
or to any national, resident or citizen of Canada, Australia, the Republic of
South Africa or Japan. Neither this announcement nor any copy of it may be
sent to or taken into the United States, Canada, Australia, the Republic of
South Africa or Japan. In addition, the securities to which this announcement
relates must not be marketed into any jurisdiction where to do so would be
unlawful.

 

Note regarding forward-looking statements

This announcement contains certain forward-looking statements relating to the
Company's future prospects, developments and business strategies.
Forward-looking statements are identified by their use of terms and phrases
such as "targets" "estimates", "envisages", "believes", "expects", "aims",
"intends", "plans", "will", "may", "anticipates", "would", "could" or similar
expressions or the negative of those, variations or comparable expressions,
including references to assumptions.

 

The forward-looking statements in this announcement are based on current
expectations and are subject to risks and uncertainties, which could cause
actual results to differ materially from those expressed or implied by those
statements. These forward-looking statements relate only to the position as at
the date of this announcement. Neither the Directors nor the Company undertake
any obligation to update forward looking statements, other than as required by
the AIM Rules for Companies or by the rules of any other applicable securities
regulatory authority, whether as a result of the information, future events or
otherwise. You are advised to read this announcement and the information
incorporated by reference herein, in its entirety. The events described in the
forward-looking statements made in this announcement may not occur.

 

Neither the content of the Company's website (or any other website) nor any
website accessible by hyperlinks on the Company's website (or any other
website) is incorporated in, or forms part of, this announcement.

 

Any person receiving this announcement is advised to exercise caution in
relation to the Subscription. If in any doubt about any of the contents of
this announcement, independent professional advice should be obtained.

 

For further information please visit www.soundenergyplc.com
(https://www.soundenergyplc.com/) , follow on X @soundenergyplc
(https://x.com/soundenergyplc?lang=en)  and LinkedIn or contact:

 

 Sound Energy plc c/o Flagstaff Communications

 Majid Shafiq CEO
 Flagstaff Strategic and Investor Communications                sound@flagstaffcomms.com

 Tim Thompson, Mark Edwards, Alison Allfrey                     +44 (0)207 129 1474
 Zeus - Nominated Adviser and Broker                            +44 (0)20 3829 5000

 James Joyce, Darshan Patel, Liv Highton (Investment Banking)

 Simon Johnson (Corporate Broking)

 

About Sound Energy PLC:

Sound Energy is a transition energy investment opportunity, listed on the UK
AIM market of the London Stock Exchange, with operations in Morocco centred
around onshore exploration, development and production of gas and advancing
renewable power generation initiatives. Gas is the focal transition fuel and
critical to the country's energy policy to move to sustainable, local
renewable energy, away from imported coal and hydrocarbon fuels. The company
has an interest in a 25-year development concession with a micro- LNG
development underway at Tendrara, the first major onshore gas resource in
Morocco, and a larger Phase 2 piped gas project awaiting FID. Small scale LNG
will supply the industrial market, whilst the piped gas development is for the
power sector. Exploration wells are funded to support infrastructure led
exploration potential. Together these give the company significant
opportunities for scalable growth on its 24,000 square km of onshore permits.
Sound Energy is therefore playing a pivotal role in responding to rising
energy demand in Morocco and facilitating the energy transition. This is
further enhanced by Sound's recent early-stage diversification into
opportunities in renewable power generation and hydrogen exploration in
Morocco. Sound has strong stakeholder engagement and partnerships with leading
Moroccan companies, thereby leveraging in-country expertise in renewable
energy projects and its gas developments.

 

 

 

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