Eco (Atlantic) Oil & Gas Ltd. is pleased to announce, further to the Company's announcement of 5 April 2022, the successful completion of an oversubscribed Equity Fundraise. A total of 64,885,496 new Common Shares in the capital of the Company have been conditionally placed with, or subscribed for by, new and existing institutional investors at a price of £0.30 per Placing Share (or, for Placees in Canada, CAN$0.50) (the "Issue Price"). On settlement, the Equity Fundraise will raise gross proceeds of approximately £19.5 million (approximately US$25.5 million) for the Company before expenses consisting of:
· 48,040,714 new Common Shares pursuant to the Placing, raising gross proceeds of approximately £14.4 million (approximately US$18.9 million);
· 10,178,116 new Common Shares pursuant to the Subscription, raising gross proceeds of approximately £3.1 million (approximately US$4.0 million); and
· 6,666,666 new Common Shares pursuant to the Retail Offer on the PrimaryBid platform, raising gross proceeds of approximately £2.0 million (approximately US$2.6 million).
In aggregate, the new Common Shares to be issued pursuant to the Equity Fundraise represent 28.8% of the issued share capital of the Company prior to the Equity Fundraise and 22.4% of the Company's issued share capital as enlarged by the Equity Fundraise.
In connection with the Placing, Berenberg, SpareBank 1 Markets and Echelon acted as Joint Bookrunners and the brokered private placement element of the Placing was conducted by Echelon acting as Canadian agents.
The Equity Fundraise Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Common Shares of the Company, including, without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.
Application has been made to the London Stock Exchange for admission of the Placing Shares, the Subscription Shares and the Retail Offer Shares to trading on AIM. The issuance of the Equity Fundraise Shares is subject to conditional approval by the TSX Venture Exchange. It is expected that AIM Admission will take place on or around 8.00 a.m. BST on 11 April 2022 and that dealings in the Placing Shares, the Subscription Shares and the Retail Offer Shares on AIM will commence at the same time.
Following AIM Admission, the enlarged issued share capital of the Company will be 289,875,431 Common Shares. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.
The Equity Fundraise is conditional upon, amongst other things, AIM Admission becoming effective and upon the Placing Agreement not being terminated in accordance with its terms.
Gil Holzman, Co-Founder and CEO of Eco Atlantic, commented:
" We are delighted with the result of this oversubscribed placing and grateful for the strong demand and support from investors, in particular our existing shareholders and our strategic alliance partners Africa Oil Corp.
"The capital raised will support the upcoming drilling of the Gazania-1 well on Block 2B, offshore South Africa, further G&G work across the entire portfolio and will also ensure that we maintain a strong balance sheet to continue executing on our consolidation strategy aimed at becoming the most exciting exploration company in the E&P Sector with multiple drilling catalysts."
Details of the Placing
In connection with the Placing, Berenberg, SpareBank and Echelon acted as Joint Bookrunners.
The Placing was conducted through an accelerated bookbuild process which was launched immediately following the release of the announcement dated 5 April 2022.
The Placing was conducted in accordance with the terms and conditions set out in the Appendix (which forms part of the launch announcement dated 5 April 2022).
The Joint Bookrunners commenced the Bookbuild immediately following the release of the announcement dated 5 April 2022. The number of Placing Shares was determined at the end of the Bookbuild.
The Placing Shares placed with investors outside of Canada and the Retail Offer Shares will be freely transferable in the UK, but these shares are subject to a restrictive hold period of four months and one day in Canada (beginning on the date of issuance of such shares) (the "Restricted Period") which will prevent t he Placing Shares from being resold in Canada or to a Canadian, through a Canadian exchange or otherwise in Canada or to a Canadian, during the Restricted Period without an exemption from the Canadian prospectus requirement.
This announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section.
In connection with the Placing the Joint Bookrunners received compensation equal to 5% of the gross proceeds of the Placing equalling approximately £720,611 (approximately CAN$1,174,595). A fee of approximately £100,000 (approximately CAN$163,000) was payable to PrimaryBid Limited in connection with the Retail Offer and no compensation was payable in connection with the Subscription.
Details of the Subscription
Africa Oil Corp, a substantial shareholder in the Company, has subscribed for 10,178,116 Common Shares at the Issue Price, raising gross proceeds of approximately £3.1 million (approximately US$4.0 million). On completion of the Subscription, Africa Oil Corp is expected to hold, in aggregate, 50,086,879 Common Shares representing approximately 17.28% of the Company's issued share capital as enlarged by the Equity Fundraise.
Related Party Transaction
Africa Oil Corp is a substantial shareholder in Eco, holding more than 10% of the Company's issued share capital, and is therefore a related party as defined by the AIM Rules for Companies. Accordingly, the subscription by Africa Oil Corp is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The independent Directors for the purposes of the Africa Oil Corp subscription, being the Directors other than Keith Hill, a Director of Africa Oil Corp, having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the terms of the Africa Oil Corp Subscription are fair and reasonable insofar as Eco's shareholders are concerned.
As insiders of the Company have participated in the Subscription, it is deemed by TSX-V regulations to be a "Related Party Transaction" pursuant to Canadian Securities Administrators Multilateral Instrument 61-101 "Protection of Minority Security Holders in Special Transactions" ("MI 61-101"), which applies to TSX-V companies. The Subscription is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the securities distributed to, and the consideration received from, interested parties does not exceed 25% of the Company's market capitalisation. The Company did not file a material change report at least 21 days prior to the closing of the Subscription as participation of the insiders had not been confirmed at that time and the Company wished to close on an expedited basis for business reasons.
Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as defined in the announcement of the Equity Fundraise made by the Company at 17:01 (BST) on 5 April 2022.
