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Zenith Energy updates on funding activity

Proactive Investors Friday, 14 February 2020 ()
Zenith Energy Ltd (LON:ZEN, CVE:ZEE) updated on its funding activities, related to an institutional investment and a new equity sharing agreement. The company confirmed the completion of an institutional investment, with the company receiving £135,000 of gross proceeds. Some 9mln new shares were issued to investors and a selection of high net-worth private investors, the company said. The shares were priced at 1.5p each. The proceeds will support the company as it advances its portfolio, along with the identification and acquisition of new oil & gas production assets. It additionally entered into an equity sharing agreement (ESA) with a consortium of institutional investors for a total of NOK 9.7mln, equating to around £810,000, released monthly over twelve months. Zenith also noted that its current total outstanding liability under its US$2.5mln convertible loan stands at US$1.05mln. "It is encouraging to see continued support from large, existing UK institutional shareholders as well as renewed investment from our institutional lenders,” said Andrea Cattaneo, Zenith chief executive. “We expect the proceeds of the ESA to provide additional funding for our activities into 2021, as well as help us to reduce our convertible debt exposure. “The innovative mechanics of the ESA are expected to enable Zenith to potentially benefit significantly from future share price appreciation.” The ESA sees a subscription of 50mln new shares at a price of NOK 0.194 per ESA share. “A significant factor in Zenith's decision to enter into the ESA is that it provides the opportunity for the company to benefit from positive future share price performance. “There is no upper limit placed on the additional proceeds receivable by the company as part of the monthly settlements and the amount available in subsequent months is not affected.  “At the same time, the company notes the corresponding risk that a fall in Zenith's share price could reduce the amount of proceeds received by the company.”

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