REG - Tlou Energy Ltd - Partially Underwritten Entitlement Offer

TLOU EnergyAnnouncement

12/05/2023 07:00

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RNS Number : 2347Z  Tlou Energy Ltd  12 May 2023

 

TLOU ENERGY LIMITED

 

 

 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR PUBLICATION, RELEASE OR
DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN THE UNITED
STATES, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH
IT WOULD BE UNLAWFUL TO DO SO. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT
CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY,
SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF TLOU ENERGY
LIMITED IN ANY JURISIDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL

 

12 May 2023

 

Tlou Energy Limited

("Tlou" or "the Company")

 

Tlou launches a partially underwritten non-renounceable entitlement offer to
raise up to A$10.65 million (£5.86 million; BWP 92.6 million)

 

 

Key Points:

 * Entitlement Offer for 4 new ordinary shares of no par value ("Ordinary
 Shares") for every 11 Ordinary Shares held, at a price of A$0.035 per share
 (£0.02, BWP0.30) to raise approximately A$10.65 million (£5.86 million; BWP
 92.6 million) (the "Entitlement Offer");

*The Entitlement Offer is partially underwritten for A$5m (£2.75m, BWP43.5m)
 by ILC Investments Pty Ltd (this entity was formerly known as IC Australia (No
 2) Pty Ltd);

*Certain Directors are participating in the Entitlement Offer with commitments
 in place for a minimum of A$392,760; and

*Funds raised and existing capital will go towards development of Tlou's power
 projects, including: drilling of gas production wells; construction of
 transmission line and substations to connect the Lesedi project to the
 electricity grid; land purchase and construction of an operations and
 generation facility; as well as general working capital requirements.

Tlou Energy Limited, the ASX, AIM and BSE listed company focused on generating power in Botswana for supply into the local and regional power markets, is pleased to announce a partially underwritten entitlement offer of up to 304,156,361 new Offer Shares at a price of A$0.035 per share (£0.02, BWP0.30) (the "Issue Price") to raise approximately A$10.65 million (approximately £5.86 million; BWP 92.6 million)).  Eligible Shareholders may subscribe for 4 fully paid ordinary shares for each 11 fully paid ordinary shares held at 7.00 pm (AEST) / 6.00 pm (BST) / 6.00 pm (CAT) on 18 May 2023 (the "Record Date").

Use of Funds

The net proceeds of the Entitlement Offer, along with existing cash, will
mainly be applied by Tlou towards:

·    construction of transmission line and substations to connect the
Lesedi project to the electricity grid;

·    drilling of gas production wells;

·    land purchase and construction of an operations and generation
facility; and

·    general working capital.

 

The Company's operations are continuing in Botswana. Gas continues to be
produced at the Lesedi 4 production pod and drilling of the next production
well Lesedi 6, commenced in April 2023. Lesedi 6 is located to the southwest
and parallel to Lesedi 4 and will comprise one vertical production well
intersected by two lateral wells drilled horizontally through the target
reservoir section for several hundred metres.

 

The objective is to increase the volume of gas available to the Company for
power generation. Once Lesedi 6 is drilled and completed, dewatering will
commence and thereafter the well should start to establish an indicative gas
flow rate.

 

Lesedi 6 is the first well of a proposed drilling program to expand gas
production at the Lesedi power project. Gas flows from Lesedi 6 are planned to
be converted to electricity under a 10MW Power Purchase Agreement (PPA) signed
with Botswana Power Corporation (BPC) once the transmission line, substations
and associated electrical infrastructure are in place.

 

Construction of the ~100km transmission lines is well advanced and scheduled
to be completed in the coming months. Work has commenced on the electrical
substations to be built at either end of the 100km line and is expected to be
completed early in 2024. In addition, plans are in place to develop the
generation site and associated infrastructure including gas gathering later
this year. Subject to results, funding from this Entitlement Offer and
subsequent capital raisings, the target is to complete all the above to
facilitate grid connection and sale of first power in 2Q 2024.

 

Funds will also be used to cover working capital requirements including
general and administrative costs across the Company's three stock exchange
listings on ASX, AIM and BSE.

 

The above is a statement of the Board's current intentions as at the date of
this announcement. However, Shareholders should note that, as with any budget,
the allocation of funds set out above may change depending on a number of
factors, including the outcome of operational and development activities,
regulatory developments, available capital, market and general economic
conditions and environmental factors. In light of this, the Board reserves the
right to alter the way the funds are applied.

 

Entitlement Offer

The Entitlement Offer will entitle each eligible holder to acquire, at their
sole discretion and at an issue price of A$0.035 or £0.02 or BWP0.30 per
Offer Share (the "Issue Price"), 4 fully paid ordinary shares for every 11
fully paid existing ordinary shares held at 7.00 pm (AEST) / 6.00 pm (BST) /
6.00 pm (CAT) on 18 May 2023 (the "Record Date").

 

Shareholders whose address on the Company's register of members is in the
United Kingdom, Botswana, Australia or New Zealand or are a Shareholder that
the Company has otherwise determined (in its absolute discretion) are eligible
to participate in the Entitlement Offer. The Entitlement Offer is being
conducted in accordance with section 708AA of the Corporations Act, as
notionally modified by ASIC Corporations (Non-Traditional Rights Issues)
Instrument 2016/84.  The Offer will be made available to Shareholders who are
resident in Botswana subject to the Company receiving approval from the BSE.

 

The Issue Price is the same as the closing price on the ASX on 11 May 2023 and
represents a discount of 13% to the closing price on AIM on 11 May 2023, being
the latest practicable date prior to the date of this announcement. The
maximum number of shares available to be subscribed for under the Entitlement
Offer is 304,156,361 ordinary shares and the Entitlement Offer will raise
A$10.65 million (£5.86 million; BWP 92.6 million) if fully subscribed. The
Offer Shares issued under the Entitlement Offer will rank equally with
existing ordinary shares including the right to receive all dividends and
other distributions declared, made or paid after their date of issue.

 

Excess Application Facility

Eligible Shareholders who take up their full entitlement will be invited to
apply for excess Offer Shares in the Entitlement Offer from a pool of those
not taken up by other eligible Shareholders ("Excess Application Facility").
There is no guarantee that applicants under the Excess Application Facility
will receive all or any of the excess shares they apply for and the Company
retains absolute discretion as to the allocation of the shares under the
Excess Application Facility.

 

The Entitlement Offer will not be open to Shareholders who have registered
addresses in countries outside United Kingdom, Botswana, Australia or New
Zealand where regulatory requirements make participation by the Shareholder
unlawful or impracticable.  The Offer will be made available to Shareholders
who are resident in Botswana subject to the Company receiving approval from
the BSE.

 

Entitlements are non-renounceable and will not be tradeable on ASX, AIM, or
BSE or otherwise transferable. Eligible Shareholders who do not take up their
entitlements will not receive any value in respect of those entitlements that
they do not take up (and their shareholding in Tlou Energy will be diluted).

 

Shareholders who are not eligible to receive entitlements will not receive any
value in respect of the entitlements they would have received had they been
eligible (and their shareholding in Tlou Energy will be diluted).

 

A prospectus in relation to the Rights Issue was lodged with ASIC on 12 May
2022.  Eligible Shareholders will receive a Prospectus ("Prospectus")
including a personalised entitlement and acceptance form which will provide
further details of how to participate in the Entitlement Offer.  The
Prospectus and personalised entitlement forms will be sent to eligible
Shareholders on 23 May 2023.

 

Further details of the Entitlement Offer are set out in the Prospectus which
will be lodged with the ASX and be available on the Company's website
www.tlouenergy.com (http://www.tlouenergy.com) from 12 May 2023.

 

Underwriting Agreement and Related Party transaction

The Entitlement Offer is partially underwritten pursuant to an underwriting
agreement with ILC Investment Pty Ltd ("the Underwriter") for up to A$5m
(£2.75m, BWP43.5m) (being a total of 142,857,142 Offer Shares). The
Underwriter's obligations to underwrite any shortfall under the offer are
subject to terms and conditions which are customary for these types of
agreements and disclosed in the Prospectus.

 

The Underwriter, Dr Ian Campbell and associated entities will not be
subscribing for any shares under their Entitlement. However, pursuant to the
Underwriting Agreement, the Underwriter will subscribe for such number of New
Shares, up to a maximum of 142,857,142, that would result in the total number
of New Shares being issued equating to 304,156,361 or as close to that number
as possible without exceeding it.

 

The Underwriter is a substantial Shareholder in the Company and is therefore a
related party as defined in the AIM Rules for Companies. The Directors
consider, having consulted with Tlou's nominated adviser, Grant Thornton UK
LLP, that the terms of the Underwriter's subscription for shares under the
Underwriting Agreement are fair and reasonable insofar as the Company'
Shareholders are concerned.

 

Entitlement Offer Shortfall

To the extent the Entitlement Offer Shares are not taken up by Shareholders
(including via the Excess Application Facility) the Company may seek to place
those unsubscribed Entitlement Offer Shares with investors at the Issue Price.
The Directors reserve the right to place any shortfall under the Offer within
3 months at a price no lower than the Issue Price.

 

The Company's allocation policy and the identity of the recipients of any
shortfall Entitlement Offer Shares allocated, will be determined on a
case-by-case basis at the time of issue and in the Company's discretion. No
decision has been made in relation to the allocation of any shortfall
Entitlement Offer Shares but noting that existing Eligible Shareholders will
have had the opportunity to subscribe for in excess of their Entitlement Offer
there is a likelihood that the Company will engage with new investors, the
identities of which are not yet known.

 

 

Directors' participation in the Entitlement Offer

Certain Directors of the Company (shown in the table below) have committed to
participating in the Entitlement Offer by subscribing for a minimum investment
between them of A$392,760. The Directors reserve their rights to subscribe for
their full Entitlements. The Directors' beneficial interests in the capital of
the Company at the date of the Prospectus and intention to participate in the
Offer, are as follows:

 

 Director         Number of Shares currently held  % Voting Power  Entitlement  Committed to invest under the Offer as a minimum  Maximum number of shares  Maximum % Voting Power at close of the Offer*
 Tony Gilby       41,000,000                       4.90%           14,909,090   9,000,000                                         50,000,000                4.38%
 Hugh Swire       11,065,921                       1.32%           4,023,971    1,000,000                                         12,065,921                1.06%
 Colm Cloonan     3,359,684                        0.40%           1,221,703    1,221,703                                         4,581,387                 0.40%
 Gabaake Gabaake  385,999                          0.05%           140,363      -                                                 385,999                   0.03%
 Martin McIver    1,097,816                        0.13%           399,205      -                                                 1,097,816                 0.10%

Note:       This table assumes no performance rights vest during the
offer period.

Tony Gilby holds 750,000 performance rights

Hugh Swire holds 500,000 performance rights

Colm Cloonan holds 4,750,000 performance rights

Gabaake Gabaake holds 2,750,000 performance rights

Martin McIver holds 750,000 performance rights

*Assumes take up of minimum committed amounts under the Offer, no performance
rights vest and that no Convertible Notes are converted before the Record Date

 

Entitlement Offer Timetable

 Event                                                                                          Date
 Announcement of Offer                                                           Friday, 12 May 2023
 Ex-date                                                                         Wednesday, 17  May 2023
 Record Date for determining Entitlements (7.00pm AEST in respect of Eligible    Thursday, 18 May 2023
 Shareholders and 6.00pm (BST and CAT) in respect of Eligible Depositary
 Interest Holders)
 Prospectus and entitlement and acceptance forms despatched to Shareholders      Tuesday, 23 May 2023

 Entitlements and Excess CREST Entitlements credited to stock accounts of
 Eligible Depositary Interest Holders

 Opening date for the Offer
 Recommended latest time for requesting withdrawal of Entitlements from CREST    Tuesday, 30 May 2023
 (to satisfy bona fide market claim only) 4.30pm on
 Latest time and date for depositing Entitlements into CREST (to satisfy bona    Tuesday, 30 May 2023
 fide market claim only) 3.00pm on
 Last day to extend the Closing Date of the Offer                                Monday, 5 June 2023
 Closing date - AIM:  latest time and date for settlement of CREST application   Wednesday, 7 June 2023
 and payment in full under the Offer (1pm BST)

 Closing date - BSE:  latest time and date for settlement of BSE applications
 and payment in full under the Offer (1pm CAT)
 Closing Date - ASX:  latest time and date for settlement of applications and    Thursday, 8 June 2023
 payment in full under the Offer (5pm AEST)
 Securities quoted on a deferred settlement basis.                               Friday, 9 June 2023
 Announcement of results of the Offer and shortfall (if any)                     Tuesday, 13 June 2023
 Shortfall settlement (if any)                                                   Wednesday, 14 June 2023
 Issue date and lodgement of Appendix 2A with ASX applying for quotation of the  Thursday, 15 June 2023
 New Shares
 Trading in New Shares commences                                                 Friday, 16 June 2023

Note: These dates are indicative only and subject to change.  Subject to the
Corporations Act, the Listing Rules, the AIM Rules and other applicable laws,
the Company has the right to vary these dates without notice, including to
close the Offer early or accept late Applications, either generally or in
particular cases.

 

Definitions

Capitalised terms, where not otherwise defined, shall have the same meaning as
set out in the Prospectus that is expected to be published on 23 May 2023.

 

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

 

By Authority of the Board of Directors

Mr. Anthony (Tony) Gilby

Managing Director

 

****

 

For further information regarding this announcement please contact:

 

 Tlou Energy Limited                              +61 7 3040 9084
 Tony Gilby, Managing Director
 Solomon Rowland, General Manager

 Grant Thornton (Nominated Adviser)               +44 (0)20 7383 5100
 Harrison Clarke, Colin Aaronson, Ciara Donnelly

 Zeus Capital (UK Broker)                         +44 (0)20 3829 5000
 Simon Johnson

 Public Relations
 Ashley Seller                                    +61 418 556 875

 

About Tlou

Tlou is developing energy solutions in Sub-Saharan Africa through gas-fired
power and ancillary projects. The Company is listed on the ASX (Australia),
AIM (UK) and the BSE (Botswana). The Lesedi Gas-to-Power Project ("Lesedi") is
100% owned and is the Company's most advanced project.  Tlou's competitive
advantages include the ability to drill cost effectively for gas, operational
experience and Lesedi's strategic location in relation to energy customers.
All major government approvals have been achieved.

 

Forward-Looking Statements

This announcement may contain certain forward-looking statements.  Actual
results may differ materially from those projected or implied in any
forward-looking statements.  Such forward-looking information involves risks
and uncertainties that could significantly affect expected results.  No
representation is made that any of those statements or forecasts will come to
pass or that any forecast results will be achieved.  You are cautioned not to
place any reliance on such statements or forecasts.  Those forward-looking
and other statements speak only as at the date of this announcement. Save as
required by any applicable law or regulation, Tlou Energy Limited undertakes
no obligation to update any forward-looking statements.

 

IMPORTANT NOTICE

 

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

 

This announcement does not constitute, or form part of, a prospectus relating
to Tlou Energy Limited (the "Company"), nor does it constitute or contain any
invitation or offer to any person, or any public offer, to subscribe for,
purchase or otherwise acquire any shares in the Company or advise persons to
do so in any jurisdiction, nor shall it, or any part of it form the basis of
or be relied on in connection with any contract or as an inducement to enter
into any contract or commitment with the Company.

 

The content of this announcement has not been approved by an authorised person
within the meaning of the Financial Services and Markets Act 2000 ("FSMA").

 

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold in the United States, except pursuant to an applicable
exemption from registration. No public offering of securities is being made in
the United States.

 

This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Canada, the Republic of South
Africa, Japan or any jurisdiction where to do so might constitute a violation
of local securities laws or regulations (a "Prohibited Jurisdiction"). This
announcement and the information contained herein are not for release,
publication or distribution, directly or indirectly, to persons in a
Prohibited Jurisdiction unless permitted pursuant to an exemption under the
relevant local law or regulation in any such jurisdiction. This announcement
has been issued by and is the sole responsibility of the Company.

 

Grant Thornton UK LLP ("Grant Thornton") is acting solely as nominated adviser
exclusively for the Company and no one else in connection with the contents of
this announcement and will not regard any other person (whether or not a
recipient of this announcement) as its client in relation to the contents of
this announcement nor will it be responsible to anyone other than the Company
for providing the protections afforded to its clients or for providing advice
in relation to the contents of this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on Grant
Thornton by FSMA or the regulatory regime established thereunder, Grant
Thornton accepts no responsibility whatsoever, and makes no representation or
warranty, express or implied, for the contents of this announcement including
its accuracy, completeness or verification or for any other statement made or
purported to be made by it, or on behalf of it, the Company or any other
person, in connection with the Company and the contents of this announcement
respect, whether as to the past or the future. Grant Thornton accordingly
disclaims all and any liability whatsoever, whether arising in tort, contract
or otherwise (save as referred to above), which it might otherwise have in
respect of the contents of this announcement or any such statement.

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