The Company announces today that it has published a Circular in relation to the placing of new ordinary shares, proposed board changes and the notice of an extraordinary general meeting.
Highlights:
Sterling has conditionally placed 4,807,315,000 new ordinary shares ("Ordinary Shares") of one pence each (the "Placing Shares") at 1.3 pence per share (the "Placing Price") to raise £62.5 million (before expenses) (the "Placing"). Proceeds of the Placing, together with the cash the Company will receive from its operating activities, to be used to:
• repay $35 million of debt upon receipt of the Placing proceeds;
• provide a stronger negotiating position for the Company in the ongoing sale process relating to the Company’s US assets;
• strengthen the working capital position of the Group. The funds could be used to:
- explore the highly prospective Sangaw North block in Kurdistan;
- strengthen the Company’s negotiating position in discussions with potential farm in partners for its assets in Cameroon and Madagascar; and
- provide funding for the Company to pursue new opportunities in line with its exploration strategy.
• Amended waiver agreement with banks to mid February 2011, conditional upon completion of the Placing.
• Board to be strengthened with the addition of Alastair Beardsall as Executive Chairman and Keith Henry as a Non-executive Director.
• Placing Price represents a discount of 52.6 per cent. to the closing middle market price on 13 August 2009.
• By mid November the Company intends to undertake an open offer to raise approximately £20.6 million at the Placing Price, which will give Shareholders, as at the Record Date (the Admission date of the placing shares, currently envisaged being 8th September), the opportunity to subscribe for two new Ordinary Shares for every nine existing Ordinary Shares held. The Ordinary Shares will trade ex-entitlement from 8.00am on 4 September2009 and the prospectus relating to the open offer will be sent to Shareholders by mid November.
• Company is no longer pursuing any potential takeover approaches it has received.
