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Highlights
- Bounty Oil & Gas N.L. (ASX:BUY) has announced a recapitalisation proposal involving notes issuance and capital raising.
- The company has issued convertible notes worth AUD 39,000 and loan notes totaling AUD 260,000.
- The proposal has outlined a placement to raise up to AUD 4.0 million.
- The plan has included a 30-for-1 consolidation of existing securities.
- Debt conversion of AUD 200,000 into equity has formed part of the restructuring strategy.
Bounty Oil & Gas N.L. (ASX:BUY) has outlined a proposed fundraising and recapitalisation plan involving convertible notes, loan notes, and a broader restructuring of its capital base. The initiative is intended to address working capital requirements and reduce short-term liabilities through equity conversion, while also providing funding for ongoing oil production and development activities in Queensland. The proposal remains subject to shareholder approval and is expected to be presented at a general meeting anticipated by May 2026.
Recapitalisation Framework
The company has entered into agreements under a convertible note trust deed and a convertible loan trust deed. The initiative forms part of a wider recapitalisation proposal aimed at restructuring the company’s financial position.
- These arrangements provide for the issuance of convertible notes with an aggregate face value of AUD 39,000 and loan notes totaling AUD 260,000.
- The plan includes a consolidation of securities on a one-for-thirty basis, alongside a placement to raise up to AUD 4.0 million.
- This placement involves issuing shares at AUD 0.0051 per share on a post-consolidation basis, with additional options attached to eligible participants.
Shareholder Approval Process
While the convertible notes have been issued under existing placement capacity, several aspects of the proposal require shareholder approval. These include the loan notes, placement shares, and associated options. The company expects to dispatch a notice of meeting in April 2026 and hold the meeting by the end of May 2026.
Proposals to be considered include the consolidation of securities, issuance of shares under placement, and conversion of outstanding debt into equity. Additional resolutions relate to the allocation of options linked to note conversions and the issuance of shares and options to the lead manager.
Debt Conversion and Capital Structure
As part of the proposal, the company intends to convert AUD 200,000 owed to CQ Pastoral Pty Ltd into equity at the same issue price as the placement. The recapitalisation also includes provisions for attaching options to shares issued upon conversion of both convertible notes and loan notes.
If shareholder approval is not obtained for option issuance, the entitlement will be cash settled based on a Black and Scholes valuation method.
Terms of Convertible and Loan Notes
The convertible notes carry an interest rate of 10% per annum and are unsecured, with a maturity of six months or earlier upon conversion or redemption. The conversion price is set at AUD 0.00017 per share pre-consolidation, equivalent to AUD 0.0051 post-consolidation.
The loan notes also carry a 10% interest rate and are secured under a general security agreement. Their conversion is contingent upon shareholder approval, and they are issued at 90% of face value.
Shares of BUY traded at AUD 0.0010 at the time of writing on 31 March 2026.
