REG - Tower Resources PLC - Institutional Placing of up to US$6 million

Tower ResourcesAnnouncement

16/01/2023 07:00

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RNS Number : 7498M  Tower Resources PLC  16 January 2023

16 January 2023

Tower Resources plc

("Tower" or the "Company")

Institutional Placing of up to US$6 million with Energy Exploration Capital
Partners LLC

 

Tower Resources plc (AIM: TRP), the Africa-focused energy company, is pleased
to announce the completion of an institutional placing (the "Placing") to
Energy Exploration Capital Partners, LLC ("EECP" or the "Placee"), a
U.S.-based institutional investor, pursuant to an investment deed (the
"Deed").

 

Institutional Placing:

 

The Placing will initially raise US$1,250,000 as a placing to the Placee of
new ordinary shares (with nominal value of 0.001p each) in the Company
("Shares") worth US$1,362,500. Following the initial placing, the Placee will
invest, at the request of the Company, up to US$1,750,000 in the aggregate for
Shares worth US$1,907,500 in the aggregate, no earlier than three months and
no later than eight months after the initial placing (such period, the
"Commitment Period", and collectively, such investments, the "Second
Placing"). If required by the Company, a further US$3,000,000 may be raised
from the Placee for Shares worth an equivalent amount, with the Placee's
consent. Further information regarding the Placing is set out below.

 

The proceeds from the Placing will be used by Tower to fund work programme
commitments in respect of its licenses in Cameroon, Namibia and South Africa
as well as for general working capital purposes.

 

 

Jeremy Asher, Tower's Chairman and CEO, commented:

 

"We are very pleased to announce this placing to EECP. The placing has been
structured specifically to fit alongside the intended bank financing led by
BGFI Bank Group, which is presently awaiting group credit committee approval.
The timing and amounts are flexible, to enable us to accommodate other sources
of financing if we wish, and to adapt to the final schedule of the NJOM-3 well
on the Njonji structure in our Thali PSC area in Cameroon. We are continuing
to discuss alternative rig options for this critical well, which will be
targeting the appraisal and testing of 18 million barrels (pMean) of
Contingent Resources and will also be penetrating additional potential
reservoirs containing further prospective resources unconnected to the
original two Njonji discovery wells. We are excited to be moving forward with
this transformative project."

 

 

Details of the Placing

 

Each placing under the Deed will be made by way of the Placee prepaying for
Shares to be issued at the Placee's request within twenty-four months of the
date of the placing (the "Placing Shares"), at the Placement Price, but
subject to the Floor Price, as set out below.

 

The Placement Price of the Placing Shares will initially be equal to 0.36p per
Share, representing a premium of approximately 130% to the closing price of
Tower's Shares on 13 January 2023. Subject to the Floor Price described below,
the Placement Price will reset after the initial month to the average of the
five daily volume-weighted average prices selected by the Placee during a
specified period immediately prior to the date of the Placee's notice to issue
Placing Shares, less an 8% discount, rounded down to the nearest fiftieth of a
pence.

 

The Placee will be entitled to a long-term hold benefit of a 10% (rather than
8%) discount to the above-mentioned formula for Placing Shares if the Placing
Shares are issued after the first anniversary of the initial investment. In
addition, the Company may benefit from share price appreciation following
issuance of Placing Shares: if an issuance of shares to the Placee would
result in the effective discount to the prevailing market price of the
Company's shares being in excess of 25%, the Placement Price will be increased
by half of such excess.

 

Further, the Placement Price will not be the subject of a ceiling and will be
the subject of the Floor Price of 0.1p per Share. If the Placement Price
formula results in a price that is less than the Floor Price, the Company may
elect not to issue shares and instead opt to repay the applicable placement
amount in cash, with a 9% premium, subject to the Placee's right to receive
Placing Shares at the Floor Price in lieu of such cash repayment.

 

The Company may at any time repay one half of the outstanding balance of each
placing in relation to which Placing Shares have not yet been issued, with a
5% premium.

 

The Placee has agreed to certain substantial limitations on its ability to
resell or otherwise dispose of the Shares it receives. The Placee is also
contractually precluded from shorting the Company's Shares.

 

Application will be made to the London Stock Exchange for any ordinary shares
issued and allotted in relation to the placing to be admitted to trading on
AIM. Such ordinary shares will only be issued to the extent that the Company
has corporate authority to do so.

 

The Placee will not be obligated to invest in the Second Placing, if the
market price of the Shares has decreased to below 0.1p and does not recover to
above that level within three months after the Placee notifies the Company
thereof. The Company may not, in any given month during the Commitment Period,
request that the Placee fund proceeds of the Second Placing that, together
with outstanding balance of the initial placing in relation to which shares
have not been issued, exceed 14.99% of the Company's market capitalisation.
For clarity, for the benefit of the Company, this limitation will apply to the
proceeds of the Second Placing in a given month only and not in the aggregate.
The Second Placing may be funded in one or more tranches, subject to the
foregoing limitation, and may be accelerated by the Placee.

 

The Company will issue to the Placee 105,000,000 Shares in satisfaction of a
fee. The Company has applied for admission of these Shares to trading on the
AIM ("Admission"), and Admission is expected to become effective on or about
20 January 2023. On Admission, these shares will rank pari passu with all
existing ordinary shares in the Company.

 

Concurrent with the initial placing, the Company will issue 82,000,000 of the
Placing Shares to the Placee, with the balance to be issued as set out above.
The Company has applied for admission of these Shares to trading on the AIM,
and this is expected to become effective on or about 20 January 2023. On
admission, these shares will rank pari passu with all existing ordinary
shares in the Company. In lieu of applying these Placing Shares towards the
aggregate number of Placing Shares to be issued, the Placee may make an
additional cash payment to the Company.

 

 

Total Voting Rights:

 

Following Admission of these Shares, the Company will have 3,741,437,955
Shares in issue with each Share carrying the right to one vote. There are no
Shares currently held in treasury. The total number of voting rights in the
Company is therefore 3,741,437,955 and this figure may be used by shareholders
as the denominator for the calculations by which they determine if they are
required to notify their interest in, or a change to their interest in, the
Company under the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority.

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company 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'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

 

Contacts:

 

 Tower Resources plc                  +44 20 7157 9625

 Jeremy Asher

 Chairman & CEO

 Andrew Matharu

 VP - Corporate Affairs

 BlytheRay                            +44 20 7138 3208

 Financial PR

 Tim Blythe

 Megan Ray

 SP Angel Corporate Finance LLP       +44 20 3470 0470

Nominated Adviser and Joint Broker

 Richard Morrison

 Kasia Brzozowska

 Novum Securities Limited             +44 20 7399 9400

Joint Broker

 Jon Beliss

 Colin Rowbury

 Panmure Gordon (UK) Limited          +44 20 7886 2500

Joint Broker

 John Prior

 Hugh Rich

 

In accordance with the guidelines for the AIM market of the London Stock
Exchange, Dr Mark Enfield, BSc, PhD, and a member of the Board of Tower
Resources plc, who has over 30 years' experience in the oil & gas
industry, is the qualified person that has reviewed and approved the technical
content of this announcement.

 

About Tower Resources

Tower Resources plc is an AIM listed energy company building a balanced
portfolio of energy opportunities in Africa across the exploration and
production cycle in oil and gas and beyond. The Company's current focus is on
advancing its operations in Cameroon to deliver cash flow through short-cycle
development and rapid production with long term upside, and de-risking
attractive exploration licenses through acquiring 3D seismic data in the
emerging oil and gas provinces of Namibia and South Africa, where world-class
discoveries have recently been made.

Tower's strategy is centred around stable jurisdictions that the Company knows
well and that offer excellent fiscal terms. Through its Directors, staff and
strategic relationship with EPI Group, Tower has access to decades of
expertise and experience in Cameroon and Namibia, and its joint venture with
New Age builds on years of experience in South Africa.

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