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28 Feb 2011
Proposed Investing Strategy
Subscription of 68,000,000 New Ordinary Shares
Admission to trading on AIM
Notice of Annual General Meeting
Introduction
Further to the announcement on 14 February 2011, the Board is pleased to announce that the Company will seek a new admission to trading on AIM as an Investing Company in accordance with Rule 8 of the AIM Rules for Companies.The Company also announces the termination of its agreement with Del Sigma (pursuant to which the Company would have acquired a 40 per cent. participating interest in the Ke Farmout Area in Nigeria) and its replacement with the Option Agreement.
The Company’s proposed Investing Strategy, which is subject to Shareholder approval at the Company’s annual general meeting (the “AGM”), is included in the admission document which has today been posted to Shareholders (the “Admission Document”). A copy of the Admission Doument can be downloaded here: Sirius Petroleum Admission Document.pdf
The Company and its Investing Strategy
On Admission, the Company will have no trading business and it is the Board’s intention to identify suitable investments in the oil and gas sector using as consideration, where appropriate, the issue of new Ordinary Shares or the cash proceeds of an issue of new Ordinary Shares. The Directors and Proposed Director intend that the first acquisition will be a Reverse Takeover (and therefore will require shareholder approval) to provide the Company with an operating business. Following the initial acquisition, the Board will re-evaluate the strategy of the Company. The first acquisition could be the Del Sigma Transaction, if the Renewal is awarded and if the Company decides, in its sole discretion, to exercise its rights under the Option Agreement.
Subscription and debt conversion
The Company has received conditional commitments from subscribers to subscribe for 68,000,000 new Ordinary Shares at 5 pence per share to raise £3,400,000 (before expenses). In addition, Toby Hayward, Mike Hirschfield, Graham Porter and Corvus Capital Limited have each agreed to convert sums recently loaned to the Company amounting to £25,000 each into 500,000 new Ordinary Shares at 5 pence per share so that the effective fundraising from the Subscription and debt conversion is £3,500,000 (before expenses). The Subscription is conditional upon Admission. The purpose of the Subscription is to raise additional funds to allow the Company to initiate the Investing Strategy. The net proceeds of the Subscription will be used to meet the costs associated with the aborted Del Sigma Transaction and to investigate potential investments and to provide the Company with general working capital.
Option Agreement
Whilst the Company has terminated the Joint Operating Agreement and is under no further obligation to Del Sigma, it has entered into the Option Agreement whereby, if the Renewal is granted, the Company may at its sole option require Del Sigma to enter into an agreement on substantially the same terms as the Joint Operating Agreement. The exercise of the Company’s option under the Option Agreement will, in all likelihood, constitute a Reverse Takeover under the AIM Rules and will therefore be conditional upon Shareholder approval following the publication by the Company of a circular constituting an AIM admission document.
AGM
The Company has today sent a circular to its Shareholders, comprising an AIM admission document, seeking shareholder approval of, inter alia, the Company’s proposed Investing Strategy. The AGM will be held at 11.00 a.m. on Wednesday 23 March 2011 at the office of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG.
Admission to trading on AIM
It is expected that Admission will become effective from 24 March 2011.
CEO’s Comment
Toby Hayward, CEO of Sirius, commented, “The Company’s admission to AIM as an investing company affords us the flexibility to exploit additional suitable opportunities within the oil and gas sector whilst retaining the ability to enter into the Del Sigma Transaction, at the discretion of the Board and Shareholders, should the Renewal be granted. I would like to thank our shareholders for their considerable patience whilst the Company’s shares were suspended from trading on AIM and we look forward to updating the market with our progress in due course.”
Capitalised terms in this announcement carry the same meaning as defined within the Admission Document, as sent to Shareholders on 28 February 2011, unless the context requires otherwise.