WESTMOUNT ENERGY LIMITED 20 November 2015
Westmount Energy Limited ('Westmount' or the 'Company')
Open Offer of up to 9,830,300 new Ordinary Shares at 4 pence per share Subscription of up to 6,000,000 new Ordinary Shares at 4 pence per share
Westmount Energy Limited (AIM: WTE), the energy investment company, announces a conditional subscription ('Subscription') to raise up to £240,000 in conjunction with an Open Offer to raise up to
£393,212 before expenses to provide ongoing working capital for the Company.
Reasons for the Fundraising
The Board has carefully considered current market conditions within the energy sector and, whilst the sector remains challenging, believes that there are opportunities for investment in the medium term that should create shareholder value.
The proceeds from the Open Offer and the Subscription will be used as working capital for Westmount to continue with its identification of investments within the energy sector.
Details of the Fundraising
Subscription - Subscription of up to 6,000,000 new Ordinary Shares at 4.0p each to raise up to £240,000 by means of a direct subscription with two private investors who are active in the energy sector
Open Offer ‐ Up to 9,830,300 new Ordinary Shares at 4.0p to raise up to £393,212 before expenses. Qualifying Shareholders are entitled to apply for 1 new Ordinary Share for every 1 Existing Ordinary Share
Offer Price ‐ The Offer Price of the new Ordinary Shares at 4.0 pence per ordinary share, represents a discount of 40.7 per cent. to the closing middle market share price of 6.75 pence on 19 November 2015
Admission ‐ Admission and commencement of dealings in the new Ordinary Shares on AIM is expected on 14 December 2015
Directors Participation - all Directors intend to take up their entitlements in full under the Open Offer
For further information, please contact:
Westmount Energy Limited www.westmountenergy.com
David King, Director Tel: +44 (0)1534 835660
Cenkos Securities plc Nomad and Broker Tel: +44 (0)20 7397 8900 Nicholas Wells / Elizabeth Bowman (Corporate Finance)
Cenkos Securities PLC, which is authorised and regulated in the United Kingdom by the FCA is acting exclusively for the Company and no other person in connection with the matters described in this announcement. No representation or warranty, express or implied, is made by Cenkos Securities PLC as to any of the contents of this announcement and, without limiting the statutory rights of any person to whom this announcement is issued, no liability whatsoever is accepted by Cenkos Securities PLC for the accuracy of any information or opinions contained in this announcement or for the omission of any material information. Cenkos Securities PLC will not be offering advice nor will it be responsible for providing client protections to recipients of this announcement in respect of the Subscription and Open Offer.
The information reproduced below is extracted from the Circular which has been published and posted to Shareholders today. The full Circular is available on the Company's website: www.westmountenergy.com
Open Offer of up to 9,830,300 new Ordinary Shares at 4 pence per share Subscription of up to 6,000,000 new Ordinary Shares at 4 pence per share
Introduction
The Board of Westmount has been considering the Company's investment policy and its ability to continue to identify and assess appropriate investments in the energy sector. The Board considers that, whilst there has been uncertainty in the sector in recent history, there will be opportunities to create value for investors in the medium term. Accordingly, it is pleased to announce that the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Issue Price for an aggregate of 9,830,300 new Ordinary Shares, to raise up to £393,212 before expenses, with a basic entitlement of 1 new Ordinary Share for every 1 Existing Ordinary Share, at 4 pence per share, payable in full on application.
The Issue Price is at a discount of 40.7 per cent. to the closing middle market price of 6.75 pence per Existing Ordinary Share on 19 November 2015 (being the last practicable date before the announcement of the Open Offer).
In connection with the Open Offer, the Board also announces that the Company has entered into a conditional subscription agreements with each of Mr John Craven and Mr Dermot Corcoran, investors in the energy sector, to subscribe for up to 3,000,000 Ordinary Shares each in the Company in a personal capacity at the Issue Price ('New Investor Subscription'). The New Investor Subscription is not conditional on the Open Offer completing but is conditional on approval of the Shareholder Resolution to approve the conversion of all of the shares in the Company to shares of no par value. The Open Offer is conditional upon completion of the New Investor Subscription. If the New Investor Subscription is not completed then the Company will not proceed with the Open Offer and the Open Offer will lapse.
The Open Offer is an invitation by the Company to Qualifying Shareholders to apply to acquire up to an aggregate of 9,830,300 new Ordinary Shares at a price of 4 pence per share. If you hold Existing Ordinary Shares on the Record Date or have a bona fide market claim, other than, subject to certain exceptions, where you are a Shareholder with a registered address or located in the United States or another Restricted Jurisdiction, you will be entitled to apply for Open Offer Shares under the Open Offer. Qualifying Shareholders will also be offered the opportunity to apply for additional shares in excess of their entitlement to the extent that other Qualifying Shareholders do not take up their Open Offer Entitlement in full. For the avoidance of doubt, Shareholders with no Open Offer Entitlement (by virtue of their owning fewer than 2,500 Existing Ordinary Shares), but excluding any Overseas Shareholder who has a registered address in the United States of America or any other Restricted Jurisdiction, may still apply for such number of Excess Shares under the Excess Application Facility as will increase their aggregate holding of Ordinary Shares in the Company to at least 5,000 Ordinary Shares in the Company.
Admission is expected to occur on 8.00 a.m. on 14 December 2015. The Open Offer is not underwritten.
The Company may use its discretion in respect of any Excess Shares not taken up by Qualifying Shareholders to allot them to such placees and Shareholders who are not Qualifying Shareholders, pursuant to the terms of the Open Offer, as the Company may determine. At present, should there be sufficient Excess Shares not taken up in the Open Offer, Gerard Walsh and Thomas O'Gorman intend to subscribe for their pro rata entitlement under the Open Offer and additional excess
entitlements to bring their aggregate fully diluted holding to not more than 29.9% of the Enlarged Shares following the Open Offer.
Reasons for the Open Offer, Subscription and Use of Proceeds
The Company operates solely as an energy investment company. The investment strategy of the Company is to provide seed capital to small companies that are identified as having significant growth possibilities and to invest in early stage listed energy companies. The Company is dependent on its investment portfolio to fund the corporate running costs. The Board has carefully considered the current market and believes that there are opportunities for investment in the medium term that will create shareholder value. Accordingly, the Board is recommending the Open Offer to existing shareholders and has entered into conditional subscription agreements as part of the New Investor Subscription which is an agreement with two strategic investors in the sector to raise up to
£240,000.
Assuming that the Open Offer Shares are fully taken up, the Open Offer is expected to raise up to
£393,212 before expenses. The proceeds from the Open Offer and the New Investor Subscription will be used for the ongoing working capital. In addition, the investment by the new investors should provide the Company with access to additional deal flow.
The Company has been informed by all of the Directors that they intend to accept their respective entitlements under the Open Offer in full. The aggregate basic entitlements of all the Directors under the Open Offer is 2,630,000 Open Offer Shares.
The Board has received irrevocable undertakings from Messrs Walsh and O'Gorman that they will subscribe for their pro rata entitlement in the Open Offer. In addition and subject to availability and the discretion of the Board, they intend to subscribe for a certain number of Excess Shares not taken up by Qualifying Shareholders to the extent that their beneficial holdings of Ordinary Shares in the Company will not exceed 29.9 per cent. of the Ordinary Shares in the Company following Admission.
An announcement will be released to the market in due course notifying the market of the acceptance by Directors and their families or connected persons of any Open Offer Entitlements and Excess Shares and the effect on their subsequent shareholdings in the Company.
Related Party Transaction
Messrs Walsh and O'Gorman each have a beneficial interest in 1,100,000 Ordinary Shares in the Company and have irrevocably undertaken to subscribe for their pro rata entitlement in the Open Offer and a certain number of Excess Shares to the extent that their beneficial holdings of Ordinary Shares in the Company will not exceed 29.9 per cent. of the Ordinary Shares following Admission. This commitment constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The Company's independent director, David King, having consulted with the Company's nominated adviser, Cenkos Securities Plc, considers that the terms of the transaction are fair and reasonable insofar as Shareholders are concerned.
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