Convertible Loan Note Facility Agreement

Corcel PLC

18 September 2023

 

Corcel PLC

("Corcel" or the "Company")

Convertible Loan Note Facility Agreement

18 September 23

Corcel Plc (London AIM: CRCL), the pan Angolan / Brazilian Oil and Gas company, with interests across oil and gas and battery metals, announces the completion of an unsecured convertible loan note facility with Extraction Srl (the "Lender"), a natural resource investment group, of which the Company's chairman is a major shareholder, that would potentially extend a total of £10m to the Company, to be drawn down over a three year period (the "Transaction"). 

Highlights:

o  Agreement with the Lender to fund £1m in October 2023 and £1m in January 2024, with a further £8m to potentially be made available over a three-year term

o  Loan proceeds are convertible into new ordinary shares at a fixed price of £0.008, a 79.8% premium from the most recent closing price on 15 September 2023, and bear 12% interest per annum

o  Facility provides both short and longer-term funding for ongoing operations in Angola and business development in Brazil and elsewhere  

Antoine Karam, Executive Chairman, commented: "This funding, offered by Extraction Srl and approved by the Corcel Board, will enable the Company to more rapidly drive value creation for shareholders and, equally importantly, is demonstrative of the changes occurring in the business both operationally in Angola and financially in the nature of the funding being utilised.  With this instrument in place, the Company now has a cost-effective long-term facility it can access without having to consider more dilutive and expensive sources of capital on offer.  With this facility now available to help accelerate our activities, we now await initial results from the drilling of our first oil well in the Kwanza Basin, Angola."

Transaction Summary

The Transaction consists of an initial issuance of 1,000 convertible loan notes of £1,000 each on or before 1 October 2023.  The notes are to be issued at par and are convertible into new ordinary shares of £0.0001 of Corcel Plc, at a fixed price of £0.008 per share.  Conversion may take place beginning 30 days after the initial issuance at the investor's discretion.  The notes will attract an interest rate of 12% per annum, accruing daily.  Any drawn down interest and principal outstanding after 36 months is to be repaid to the Lender in either cash or shares at the discretion of the Lender.    

A second tranche of notes of £1,000,000 is to be issued on the same terms and funds made available to the Company on or before 1 January 2023.  Additional drawdowns of up to £8,000,000 against the facility on the same terms are to be mutually agreed between the Lender and the Company over the duration of the facility.  

Related Party Disclosure

Extraction Srl is 45% owned by the Executive Chairman of Corcel Plc, Antoine Karam.  Accordingly the transaction between the Company and the Lender is a related party transaction, pursuant to Rule 13 of the AIM Rules.  As such, Antoine Karam has not been involved in the approval of the Transaction by the Company's Board. 

The directors of the Company independent of the Transaction, Yan Zhou and Ewen Ainsworth, having consulted with the Company's nominated advisor, WH Ireland Ltd, consider the terms of the Transaction to be fair and reasonable insofar as the Company's shareholders are concerned. 

The person responsible for arranging the release of this announcement on behalf of Corcel is Ewen Ainsworth.

For further information, please contact:

Antoine Karam                                                                        Corcel Plc Executive Chairman

[e-mail]                                                                                   

James Joyce / James Bavister /Andrew de Andrade       WH Ireland Ltd NOMAD & Broker

0207 220 1666                                                                                        

Patrick d'Ancona                                                                    Vigo Communications IR

0207 3900 230                                                                                      

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

END