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Nervesa Reserve Based Lending - Heads of Terms
Nervesa Reserve Based Lending - Heads of Terms.
About this update from Sound Energy Plc
[{"type":"text","content":"\n \nRNS Number : 3059S Sound Oil PLC 23 September 2014 \n \n\n 23 September 2014\n \nSound Oil plc\n(\"Sound Oil\" or the \"Company\")\n \nNervesa Reserve Based Lending - Heads of Terms\n \nSound Oil, the European / Mediterranean focused upstream oil and gas company, is pleased to announce signature of non-binding Heads of Terms in respect of a Reserve Based Lending facility for the Nervesa discovery, onshore Italy. \n \nThe Company is pleased to confirm, subject to contract, a Euro 7 million 24 month loan secured on the Carita permit (which holds the Nervesa discovery) and without recourse to the Company (the \"Proposed Funding\"). The Proposed Funding is to be provided by Greenberry S.A. (\"Greenberry\"), an affiliate of Continental Investment Partners S.A. (\"Continental\") (Sound Oil's cornerstone investor) and will attract a 5% annual coupon. As part of the Proposed Funding arrangements Greenberry will be granted a 4% royalty on gross revenues from the Nervesa discovery within the Carita permit area and an arrangement fee. Greenberry have agreed for the arrangement fee to be paid in Sound Oil shares at an effective issue price of 16 pence per ordinary share (a 25% premium to the closing price on Friday 19 September 2014) which will result in the issue of 3,906,250 ordinary shares in the Company. The loan will be issued at 91.25% of par value.\nFollowing the agreement in principle of the Proposed Funding, the Company has decided not to continue with negotiations with respect to the farm in transaction with the Niche Group plc.\nRelated Party Transaction\n \nContinental is currently directly and indirectly interested in 15.48% of the Company's issued share capital and Marco Fumagalli, a director of the Company, is Managing Partner of, and a 25% shareholder in, Continental. \n \nUnder the AIM Rules for Companies therefore, Continental is deemed to be a related party of the Company. As a result, the entry by the Company into a binding agreement with Continental or an affiliate of Continental in connection with the Proposed Funding will constitute a related party transaction pursuant to Rule 13 of the AIM Rules for Companies and accordingly a further announcement will be made at the time such an agreement is entered into.\n \nJames Parsons, Sound Oil's Chief Execut...