PRESS
5 September 2012
FOR IMMEDIATE RELEASE
Cove Energy plc
Funding arrangements with PTTEP Africa Investment Limited
On 17 August 2012, PTTEP Africa Investment Limited ("PTTEP
AI") declared wholly unconditional its offer dated 1 June
2012 for the entire issued and to be issued share capital of
Cove Energy plc (("the Company" or "Cove", AIM: COV), the
AIM-quoted upstream oil and gas company, and Cove applied to
the London Stock Exchange for the cancellation of trading in
Cove shares on AIM. The cancellation of trading in Cove
shares on AIM is expected to take effect on
18 September 2012. PTTEP AI announced on 23 August 2012 the
exercise of its right to acquire compulsorily the Cove shares
that had not already been assented to its offer.
PTTEP AI and Cove have today agreed the terms on which monies
may be provided by PTTEP AI to Cove from time to time in
order to provide Cove with the funding it requires in order
to meet its existing and ongoing working capital and other
financial obligations and for its general corporate purposes
(the "Funding Arrangements"). PTTEP AI is not obliged under
the Funding Arrangements to provide Cove with funding. The
principal amount of monies outstanding from time to time
under the Funding Arrangements is referred to herein as the
"Loan Amount".
Interest periods under the Funding Arrangements will be one,
two, three or six months or such other periods as Cove and
PTTEP AI may from time to time agree ("Interest Period"). The
rate of interest for each Interest Period shall be LIBOR for
an amount denominated in US Dollars for such period plus
1.85%. Interest will be calculated on the basis of the actual
number of days elapsed and a year of 360 days and, unless
otherwise agreed, interest will be payable on the last day of
each Interest Period.
Cove will repay the whole or any part of the Loan Amount,
together with accrued interest and all other amounts
outstanding, within 5 Business Days of demand by PTTEP AI.
Cove may prepay the Loan Amount in whole or part at any time
on giving 5 Business Days' notice. No amount prepaid may be
re-borrowed. PTTEP AI may require repayment of the whole or
any part of the Loan Amount, together with accrued interest
and all other amounts outstanding , immediately upon notice
given by PTTEP AI to Cove if:
(a) Cove fails to perform any of its obligations under the Funding Arrangements; or
(b) Cove is insolvent or unable to pay its debts as they fall due, or the value of its assets is less than the amount of its liabilities (taking into account contingent and prospective liabilities); or
(c) any step is taken by Cove with a view to a composition with creditors, or a moratorium or suspension of payments in relation to any of its debts; or
(d) any step is taken with a view to the winding-up or reorganisation of, or the appointment of an administrator, receiver or administrative receiver in relation to
Cove or any of its assets, or the holder of any security over any asset of Cove takes any step to enforce that security; or
(e) it becomes unlawful for PTTEP AI to perform any of its obligations or to fund amounts outstanding under the Funding Arrangements.
Interest will accrue on any amount unpaid under the Funding
Arrangements, from the due date up to the date of actual
payment, both before and after judgment. This interest will
be computed by reference to successive periods selected by
PTTEP AI. The rate of interest applicable during each of
these periods will be a rate per annum equal to 1% above the
interest rate that would be applicable (LIBOR plus 1.85%) if
the unpaid amount constituted all or part of the Loan. This
interest shall be paid in arrears on the last day of each of
these periods and on the date of payment of the unpaid
amount. Unpaid default interest will be compounded.
The maximum Loan Amount under the Funding Arrangements is
$215m or as Cove and PTTEP AI otherwise agree from time to
time.
If any amount to be provided under the Funding Arrangements,
when aggregated with the other borrowings of the Cove group,
would exceed the then-current cap on corporate borrowings in
Cove's articles of association, the directors of Cove have
agreed to use their best endeavours, as soon as reasonably
practicable, to remove the then-current cap on corporate
borrowings. In these circumstances, in the event that the
articles of association of Cove are not so amended within
nine months thereof, the directors of Cove will use their
best endeavours to procure that the relevant amount is
instead capitalised by the issue of Cove ordinary shares. In
the event that neither of these events has taken place within
eighteen months thereof, PTTEP AI will be deemed to have made
a capital contribution to Cove equal to the pounds sterling
equivalent amount of the relevant amount.
Should Cove run out of available working capital to meet its
obligations, it may become insolvent or unable to pay its
debts as they fall due, or the value of its assets may become
less than the amount of its liabilities (taking into account
contingent and prospective liabilities).
The independent directors, John Craven and Michael Nolan (the
"Independent Directors"), have, in assessing the relative
merits of Cove entering into the Funding Arrangements, taken
the following into consideration:
(a) the likely availability of, and commercial terms relating
to, alternative third party finance;
(b) the commercial basis on which the Funding Arrangements
are being made available to
Cove by PTTEP AI;
(c) the consequences of not having sufficient funding to meet
its obligations.
The Independent Directors consider, having consulted with
Cenkos Securities plc, the Company's Nominated Adviser, that
the terms of the Funding Arrangements are fair and reasonable
insofar as Cove's shareholders are concerned.
For further information please contact: Cove Energy plc
John Craven, CEO Tel: +44(0)20 7831 3113
c/o Billy Clegg
Cenkos Securities
Jon Fitzpatrick Tel: +44 (0)20 7397 8900
Ken Fleming Tel: +44 (0)131 220 9772
FTI Consulting Tel: +44 (0)20 7831 3113
Billy Clegg
Edward Westropp
A copy of this announcement will be available at
www.cove-energy.com. The content of the website referred to
in this announcement is not incorporated into and does not
form part of this announcement.
Cenkos Securities plc, which is authorised and regulated in
the United Kingdom by the Financial Services Authority under
FSA number 416932, is acting exclusively as Nominated Adviser
and Broker to the Company and is not acting for or advising
any other person and accordingly will not be responsible to
any person other than the Company for providing advice in
relation to the contents of this announcement. Neither Cenkos
Securities plc nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct
or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a customer of Cenkos
Securities plc in connection with this announcement, any
statement contained herein or otherwise.
This announcement is not intended to, and does not,
constitute or form part of any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of, any securities
whether pursuant to this announcement or otherwise. The
distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law and therefore
persons into whose possession this announcement comes should
inform themselves about, and observe, such restrictions. Any
failure to comply with the restrictions may constitute a
violation of the securities law of any such jurisdiction.
- Ends -
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