Africa Energy Corp., an oil and gas company with exploration assets offshore South Africa and Namibia, announces the successful closing of the equity issue (the “Private Placement”) of common shares in the Company (the “Common Shares”) previously announced on
September 21, 2020. The TSX Venture Exchange (“TSXV”) conditionally approved the Private Placement on September 23, 2020.
The SEK denominated Private Placement rendered gross proceeds of approximately USD 28 million to the Company through the issuance of 81,667,000 Common Shares at a price of SEK 3.00 (corresponding to approximately CAD 0.45) pershare. Following the Private Placement, the Company has 883,940,268 Common Shares outstanding. Payment for the Common Shares was made in cash.
The net proceedsfrom the Private Placement are expected to be used to finance the increased funding obligations from the ongoing drilling program of up to three exploration wells on Block 11B/12B
offshore South Africa resulting from the pending transactions to increase the Company’s effective interest in Block 11B/12B from 4.9% to 10% announced on 24 August 2020.
Common Shares issued to Canadian residents will be subject to resale restrictions under Canadian securities laws expiring January 31, 2021. Common Shares issued to residents outside of Canada
pursuant to the Private Placement may not be sold, transferred or otherwise disposed of on the TSXV or, except pursuant to an exemption from prospectus requirements under Canadian securities laws, to any person in Canada or otherwise into Canada until January 31, 2021.
Pareto Securities acted as sole global coordinator and sole bookrunner, and Arctic Securities AS and Fearnley Securities AS acted as co-managers for the Private Placement (the “Managers”). Pareto Securities is also acting as Certified Adviser to Africa Energy on Nasdaq First North Growth Market. A brokerage fee on the Private Placement of approximately USD 0.8 million was paid to the Managers.
The Private Placement includes four related parties of the Company: 1) Africa Oil Corp.; 2) Lorito Holdings (Guernsey) Limited, a private corporation owned by a trust whose settlor was the late Adolf H. Lundin; 3) Zebra Holdings and Investments (Guernsey) Limited, a private corporation owned by a trust whose settlor was the late Adolf H. Lundin; and 4) Garrett Soden, the Company’s President and CEO (collectively, the “Related Parties”). The issuance of Common Shares to the Related Parties constitutes a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61- 101”). The Company has relied on the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61- 101 from the valuation and minority shareholder approval requirements in MI 61-101 in respect of the Related Parties participation in the Private Placement,since neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Related Parties’ investment exceeds 25% of the Company’s market capitalization.
