Bahamas Petroleum Announces Update on Funding Agreements for up to $20M

Source: www.gulfoilandgas.com 12/16/2020, Location: South America

Further to the announcement of 14 December 2020 of the Funding Agreements entered into by BPC, the Company has advised the following additional details pertaining to the Funding Agreements.

The counterparty to those Funding Agreements is 1798 Volantis Fund Ltd (the 'Investor'), a fund managed on a discretionary basis by Lombard Odier Asset Management.

As set out in the Announcement, as part of the terms of the Funding Agreements, on the earlier of (i) 60 days after the date of spudding of BPC's Perseverance-1 well in The Bahamas; (ii) 31 December 2021; or (iii) such other date where a reconciliation is permitted under the Funding Agreement (the 'Relevant Assessment Date'), BPC may be required to make a cash payment to the Investor to the extent that the Investor's aggregate return from a sale, if any, of those new ordinary shares has been less than 115% of the subscription price. BPC is only required to make a payment in the event the Investor sells shares for, in aggregate, an average price of less than 2.3 pence per share (being 115% of the subscription price), with the payment being the difference between 2.3 pence per share and the average sales price. No payment is required for any shares that the Investor continues to hold at the Relevant Assessment Date. On the basis that the Perseverance-1 well spuds on 20 December 2020, the Relevant Assessment Date would be 18 February 2021. There is no capacity for any such payment to be made in the form of shares, such that the level of dilution to BPC under the Funding Agreement is fixed and knowable.

This arrangement is substantially the same as the agreement entered into with Trafalgar Capital Management (HK) Limited, a Hong Kong based financier, for the financing of certain aspects of the Columbus merger transaction earlier in 2020. The final reconciliation date under that agreement has recently passed, and the ultimate outcome was one advantageous to BPC, in that there was no additional cost to BPC for funding that was secured at the time of the merger on advantageous terms.


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