Providence Resources PLC (LON:PVR) has moved to secure its financial future beyond the end of this month with a conditional share placing acting as a stop-gap as it continues to await the receipt of US$9mln as part of its farm-out of the Barryroe field.
Today, Providence announced it is raising US$3.76mln through the sale of 59.76mln shares (equivalent to about 10% of the company’s current shares) priced at 5.1p each, representing a 7.3% discount to Wednesday’s closing price.
The cash will support the group’s running costs, which are now low after a recent restructuring, as well as covering the remainder of the Barryroe well site survey costs.
Providence earlier this week told investors that the first of two initial survey locations had been completed and noted that, at that time, the programme could potentially be expanded subject to receipt of new funds.
With the placing funds the company now expects to have sufficient working capital to cover its operations until February 2020.
Providence, in a statement, said: “The board is currently undertaking a strategic review of the options available to the company on future financing alternatives to finance future working capital obligations beyond that date.”
The share placing is conditional upon the company securing permission from shareholders so that it can execute a capital reorganisation – as the proposed placing price is lower than the nominal value of the shares, which is not allowed in Irish company law.
An extraordinary general meeting will take place in Dublin on 30 September, which is the same date as the current deadline for the receipt of the APEC farm-out loan advance.
Providence also posted its results for the half-year ended June 30. The company said the first six months of the year was a “very difficult period”. The group pointed to significant delays for key operational related consents at Barryroe while having to manage the increasingly negative political climate and deal with the delays in the payment of the funds due from APEC.
It also had to carry out a major corporate re-engineering process and execute a placing to provide essential working capital for our business.
“Despite the significant political and commercial headwinds that we have faced, the materiality of both our portfolio and investment in offshore Ireland remains, and the Board remain focused on realising value for all of our shareholders,” said chief executive Tony O’Reilly.
In the first half, the group made a loss before tax of €5.5mln and ended the period with total cash of €1.7mln with no debt.
In a later separate announcement, the company revealed the results of its annual general meeting. The re-election of non-executive director James McCarthy was not presented as he decided to step down. Meanwhile, chief financial officer, Simon Brett, has been also appointed company secretary, replacing Criona Ryan.