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Highlights
- Pennpetro Energy opens tender process for up to 8 million shares, targeting a minimum bid price of 9.0p.
- Funds raised will address financial conditions of the Globalvision Agreement, settle historical creditors, and provide working capital.
- Dutch auction process managed by Peterhouse Capital will close on 7 January 2025.
Pennpetro Energy PLC (LSE:PPP) has announced plans to raise capital through the placement of up to 8 million shares via a Dutch auction tender process managed by its brokers, Peterhouse Capital. The initiative, which officially opens today, will run until 5 PM on 7 January 2025.
Details of the Placing
The auction process will allow sophisticated and professional investors, alongside existing retail investors, to bid for shares at a minimum price of 9.0p. This comes after the company recently raised £120,000 on 27 November 2024, at a share price of 12p—representing a premium to the closing price of 9.55p on the day trading was suspended.
The final placing price will be determined by the company’s Board of Directors in consultation with Peterhouse Capital, taking into account all bids received, their respective prices, and quantities. Shares issued through the placement will only be admitted for trading once the suspension on the company’s stock is lifted.
Purpose of the Fundraising
The proceeds from this placement will be utilized for:
- Addressing financial conditions stipulated under the Globalvision Agreement.
- Settling additional historical external creditors, as outlined in the company’s December 20, 2024, regulatory news statement.
- Providing working capital in preparation for relisting.
Pennpetro Energy has explicitly clarified that the funds raised will not be used to repay director loans or for preferential distributions to directors.
Conflict of Interest Concerns
The company also addressed concerns raised by shareholders regarding perceived conflicts of interest with Petroquest Energy Limited, a secured lender. Pennpetro clarified that Petroquest’s decisions are made independently by an external FCA-regulated asset manager, ensuring no influence from the company’s directors or shareholders.
Dutch Auction Process Explained
The Dutch auction format will allow investors to submit bids for their desired quantity of shares, starting at the minimum bid price of 9.0p. The final placing price will be established based on these bids, ensuring transparency and fairness in the allocation process.
Pennpetro Energy is optimistic that the auction will attract substantial interest, allowing the company to achieve its fundraising goals while addressing critical financial and operational priorities.
