Chief executive Arthur Millholland said the company would now have a firmer financial footing going forward
() (CSE:XOP) said it has raised £1.3mln in a share placing and has also reached a ‘debt exchange’ agreement with creditors.
The placing investors comprise two institutions and two high net worth investors. Some 621mln new shares will be issued, at a price of 0.3p each.
In the proposed ‘debt exchange’ transaction, the company will issue around 411mln new shares as settlement of debts to unsecured creditors, along with accrued payments due to employees and management.
It is expected that the moves will improve the company’s working capital position as it works to conclude definitive agreements for the OPL 226 project in Nigeria.
“We are pleased with the outcome of this Placing and these new shareholders who are well-known investors in the Oil and Gas E&P space, some of whom I have known more than 20 years,” said Arthur Millholland, COPL chief executive in a statement.
He noted that “the company is on firmer financial footing going forward.
“We continue to work with Essar to complete the legal documentation required to effect the OPL226 transaction as outlined in the agreement in principle announced in June 2020, and we anticipate concluding that documentation shortly.”
Ryan Gaffney, COPL chief financial officer, added: “The placing provides COPL with new financing and working capital that will allow us to progress our efforts on OPL226 and to evaluate new opportunities in line with COPL’s strategy.
“The completion of the Debt Exchange has the same effect as raising new financing at a very low cost. COPL will emerge with an improved balance sheet now that it has eliminated these payables and, with new shareholders that we believe will be supportive as we grow.”