Admission to Official List &

RNS Number : 1378N

Capital Drilling Limited

07 June 2010

 



Immediate Release

7th June 2010

Capital Drilling Ltd

Admission to the Official List and Placing of New Ordinary Shares

Capital Drilling Ltd ("Capital Drilling" or "the Group"), the mineral drilling services company with a focus on emerging markets, is pleased to announce its admission today to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange.

Highlights include:

·      Admission to the Official List of the UK Listing Authority (Premium Listing)

·      33.8m New Shares placed  at 61.5p per share

·      Gross proceeds of £20.8m, of which £13.6 million was primary

·      Market capitalisation of approximately £82.8 million

Principal Terms of the Placing

The Company has raised gross proceeds of £13.6 million (circa US$20 million) by way of a Placing of 22.1million shares at 61.5p per share. The Placing, which was conducted by Liberum Capital Limited, who acted as Sponsor, financial adviser and broker to the placing, comprised the issue by the Company of 22.1 million New Shares and the sale of 11.7 million Sale Shares by the Selling Shareholders (with shareholders selling part of their stakes in order to increase the Company's free float to the LSE's minimum 25% level). The New Shares being issued by the Company and the Sale Shares being sold by the Selling Shareholders under the Placing represent approximately 16.4 per cent. and 8.7 per cent., respectively, of the 134,592,800 shares in issue following Admission.

Further details of the placing are set out in the prospectus published by the Company which is available at the offices of Nabarro LLP (Lacon House, 84 Theobald's Road, London, WC1X 8RW), Liberum Capital Limited (Ropemaker Place, Level 12, 25 Ropemaker Street, London, EC2Y 9AR) and Capital Drilling Ltd (Canon's Court, 22 Victoria Street, Hamilton, HM12, Bermuda).

Commenting on Capital Drilling's listing in London, Brian Rudd, CEO, said:

"Capital Drilling's admission to the Official List and the placing of shares has been a great result in challenging markets. That investors have come into the Company at this time should be viewed as a ringing endorsement of the strength, quality and future potential of the business. With the placing complete we will look to capitalise on the huge growth potential in the sector and to create material value for our new share holders."

For further information please access Capital Drilling's website www.capdrill.com or contact:

Capital Drilling
Jamie Boyton, Executive Chairman		[phone]
Brian Rudd, CEO
Liberum Capital Limited
Clayton Bush		[phone]
Buchanan Communications
Bobby Morse		[phone]
Chris McMahon

The contents of this announcement have been prepared by and are the sole responsibility of Company.  Liberum Capital Limited, which is authorised and regulated in the UK by the Financial Services Authority, is acting as sponsor, financial adviser and broker exclusively to the Company and no one else in connection with Admission or the Placing and will not regard any other person as its client in relation to Admission or the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Liberum Capital Limited, or for providing advice in relation to Admission, the Placing, this announcement or any transaction or arrangement or matter referred to herein.

About Capital Drilling

Capital Drilling provides specialised drilling services to mineral exploration and mining companies in emerging markets, for exploration, development and production stage projects. The Company owns and operates a fleet of 64 drilling rigs with established operations across countries in Tanzania, Zambia, Egypt, Pakistan, Mozambique, PNG, Eritrea, Hungary and Chile. The Group's corporate headquarters is in Singapore and it has administrative offices in South Africa and Serbia.

Principal Business Activities

Drilling services are required by the minerals, environmental (including water) and energy industries.

The Group currently provides services to mineral exploration and mining companies. Drilling

services are critical for mining companies to discover deposits, and to estimate the size and quality

of reserves. The Company provides drilling services for exploration, development and production

stage projects.

Principal Markets

The Group currently has operations in Africa, Asia, Latin America and Eastern Europe, with a focus on

emerging markets. Due to maturing markets and increased regulatory hurdles for mining in developed

countries, many mining and exploration companies are now looking towards resource-rich emerging

markets for their production growth.

Clients

The Group's key clients are global major mining companies and emerging producers developing

large projects. The Company is focused on building strong and long lasting relationships and key

clients include African Barrick Gold plc, AngloGold Ashanti Limited, Barrick Corporation,

Centamin Egypt Limited, Equinox Minerals Limited and Riversdale Mining Limited.

Competitive Environment and Strengths

The drilling services industry for minerals is highly fragmented, with a few major market participants

and a large number of small, often family-run, regional or local companies. Key large industry

participants in the global mining drilling services industry include Boart Longyear Limited, Layne

Christensen Co. and Major Drilling Group International Inc.

The Directors believe the Group's competitive strengths are as follows:

·      Strong client relationships and a sustainable client base

·      Experience and relationships in emerging market countries

·      Emphasis on health and safety and the environment

·      Focus on large scale multi-rig development and production stage drilling projects by major

mining companies which reduces the Group's earnings volatility and provides more

sustainable margins

·      Experienced management and operational teams with proven operating track record

·      Expertise in specialised drilling projects

Reasons for Admission and Use of Proceeds

The Group is seeking a listing to establish a capital structure for the Company to pursue growth

opportunities and its business strategy, including attracting and incentivising employees. In addition, the

Directors believe that a premium listing of the Common Shares on the London Stock Exchange's Main

Market for listed securities will be helpful in raising the profile of the Company.

The Company will use the net proceeds of the Placing of the New Shares as follows (in order of priority):

·      approximately $3,000,000 to repay existing debt immediately following Admission;

·      approximately $11,000,000 to purchase new drilling rigs and associated support equipment in

order to fulfil existing and new client contracts, as and when required;

·      approximately $2,000,000 for working capital purposes associated with maintenance and

investing for the increased fleet size; and

·      approximately $2,000,000 to refurbish existing drilling rigs.

 

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