Sunbird Energy has announced a deal with Vandasia Investments under which the gas explorer and developer will secure a $25 million cash injection and a new major strategic partner.
Sunbird Energy has announced a deal with Vandasia Investments under which the gas explorer and developer will secure a $25 million cash injection and a new major strategic partner.
The funds raised will be used to advance Sunbird’s Ibhubesi gas project in South Africa through FEED studies, commercial negotiations and regulatory approval to a final investment decision in 2015.
Vandasia will acquire a 43.9 per cent interest in Sunbird over two tranches with an overall weighted average price of $0.34 per share.
The deal represents a weighted average premium of 79 per cent on Sunbird’s closing price of $0.19 on September 8.
Speaking at the RIU Good Oil Conference in Fremantle today, Sunbird managing director William Barker said the deal was a ‘transformational funding transaction’.
“It will see over $25 million of capital raised at premiums in the order of 50 to 130 per cent of our share price from yesterday,” Mr Barker said.
Following the issue of 20,367,127 tranche one shares, Vandasia will hold 14.9 per cent of the company’s issued capital.
Vandasia has exercised its rights under the agreement to appoint one director, nominating Niyi Oyedele to serve as its representative.
The issue of an additional 23,021,757 tranche two shares is subject to shareholder approval and execution of a Gas Sales Term Sheet by no later than November 30 2014.
Simultaneously with the issue of the tranche two shares, Vandasia will purchase and exercise 47,750,000 existing $0.20 options to be converted pending a separate shareholder resolution.
“With the funding in place ... we believe that Sunbird really is positioned to be the leading force in gas development in South Africa and one that provides great value for our shareholders and huge national benefits to the country as well,” Mr Barker said.
Sunbird and Vandasia have agreed to develop a number of strategic partnering agreements covering joint operations, infrastructure supply and additional gas supply options to supplement any excess gas demand.
The deal represents a substantial capital injection for Sunbird, with their market cap currently at $22 million.
Before the agreement, Salt Mineral Investments represented a substantial shareholding of 35.49 per cent.
Perth-based Sunbird started trading in January 2012, following the successful completion of a $9 million initial public offer, issuing 45 million shares to investors.
Sunbird’s share price closed at 26 cents per share.
