Subscription by Petrichor Partners LP (“Petrichor Partners”) and Jalapeño Corporation (“Jalapeño”) for £1,051,035 Convertible Loan Notes

Egdon Resources plc (AIM: EDR, "Egdon") is pleased to announce that it has entered into subscription agreements with Petrichor Partners and Jalapeño (the “Subscription Agreements”), subject to certain terms and conditions, to raise gross proceeds of approximately £1.05 million through the issue of convertible loan notes (the “Convertible Loan Notes”) in order to fund ongoing exploration and development projects.The capitalised terms in this announcement shall have the meaning ascribed to them in the definitions section contained in Appendix 2 of this announcement.Petrichor Partners and Jalapeño may, at any time when any of the Convertible Loan Notes are outstanding, convert such outstanding amount into Ordinary Shares in the Company at a price of 1.55 pence per Ordinary Share (the “Conversion Price”) following the issue of the Convertible Loan Notes. Subject to Petrichor Partners and Jalapeño not exercising their option to convert the amount outstanding into Conversion Shares during the 12 months following the issue of the Convertible Loan Notes, they will be redeemed by the Company 12 months following their issue.The general partner of Petrichor Partners is HEYCO International Inc (“HINT”), a subsidiary of HEYCO Energy Group Inc (“HEYCO”). HEYCO, through its wholly-owned subsidiary Petrichor Holdings Coöperatief U.A. (“Petrichor”), together with its Connected Persons and other persons acting in concert with it and as described more fully in Part III of the Circular, is currently interested in 111,643,046 Ordinary Shares, representing 34.01 per cent. of the Existing Ordinary Shares.Based on the assumptions set out in Appendix 3 of this announcement, the Directors expect that the conversion of the Convertible Loan Notes (including the capitalisation of any interest which will accrue on the Convertible Loan Notes) would result in the issue to Petrichor Partners of a maximum of 69,684,386 Ordinary Shares and the issue to Jalapeño of a maximum of 3,549,020 Ordinary Shares (together, the “Conversion Shares”), increasing the total interest of the Concert Party to a maximum of 184,876,452 Ordinary Shares, representing 46.04 per cent. of the Company’s Enlarged Ordinary Share Capital (assuming no options issued by the Company or other securities convertible or exchangeable into Ordinary Shares are exercised other than those held by members of the Concert Party and that the Company does not issue any other Ordinary Shares), and the Concert Party would therefore be interested in Ordinary Shares carrying 30 per cent. or more of the Company’s voting share capital but not hold Ordinary Shares carrying more than 50 per cent. of more of such voting rights.As Petrichor is currently interested in more than 10 per cent. of the issued ordinary share capital of the Company, the subscription for the Convertible Loan Notes is a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. For the purposes of the AIM Rules for Companies, the Directors of the Company, having consulted with the Company’s nominated adviser, WH Ireland, consider that the terms of the transaction are fair and reasonable so far as its Shareholders are concerned.The Takeover Panel (the “Panel”) has agreed, however, to waive the obligation for the Concert Party to make a general offer ("Rule 9Waiver") that would otherwise arise as a result of the issue of the Convertible Loan Note Shares to the Concert Party, subject to the approval, on a poll, of the Independent Shareholders (the “Whitewash Resolution”). Accordingly, the Whitewash Resolution is being proposed at the General Meeting and will be taken on a poll at the General Meeting, notice of which is set out in the Circular to be distributed to Shareholders on or around the date of this Announcement. The General Meeting is to be held at the offices of Egdon Resources plc at The Wheat House, 98 High Street, Odiham, Hampshire RG29 1LP at 10.00 a.m. on 22 January 2021.The Company notes the guidance issued by the UK government restricting social gatherings in view of the ongoing COVID-19 pandemic and the fact that, if such guidance remains in place on the date of the General Meeting, as seems likely, shareholders will be prohibited from attending the General Meeting. Given the current guidance the Company requests that shareholders do not attend the General Meeting but instead appoint the chairman of the General Meeting as a proxy to ensure their vote is recognised and provide voting instructions in advance of the General Meeting. Other named proxies will not be allowed to attend the General Meeting and their votes will not be countedMark Abbott, Managing Director, commented: “This is a major endorsement from HEYCO and strong confirmation of the belief of HEYCO and its management in the longer-term prospects for Egdon. The funds raised by the issue of the Convertible Loan Notes will significantly strengthen the Company’s financial position and allow it, together with existing cash, to fund ongoing exploration and development projects such as the development of the Wressle oil field, planning for the Biscathorpe-2 side-track well and preparation for the acquisition of 3D seismic over the Resolution Prospect and for additional working capital to maintain and develop the assets and opportunity base of the business.”View or Download Full AnnouncementView Documentation