Primorus Investments plc
("Primorus" or the "Company")
Disposal of 5% of HHDL
Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to report that the Company has entered into a conditional sale and purchase agreement ("SPA") to dispose of a 5% interest in Horse Hill Developments Limited ("HHDL") to Solo Oil plc ("Solo"), a company admitted to trading on AIM. Solo already holds a 10% interest in HHDL which in turn holds a 65% interest in two onshore UK petroleum exploration licences, PEDL 137 and PEDL 246, which contain the Horse Hill oil discovery.
Solo has agreed to pay Primorus an aggregate consideration of £1,000,000, made up of £650,000 in cash and the balance in Solo shares to be priced at the 10-day volume weighted average price prior to the date on which the transaction completes. The SPA is conditional on the written consent of each of the members of HHDL to the sale of shares as set out in HHDL's articles of association.
Once the disposal is completed, Primorus' holding in HHDL will be 5%.
Alastair Clayton, executive director of Primorus, commented "We are pleased to have undertaken today's conditional disposal. This transaction was designed to achieve three important outcomes from our perspective:
"Firstly, to crystallise some of our investment in HHDL in advance of the long-term flow test. These operations carry significant expense and outcomes are not always guaranteed, thus the opportunity for us to realise consideration for (pro rata) a total greater than book cost, retain significant exposure to HHDL via shareholdings in Solo and Alba Mineral Resources that are inherently more liquid than a direct operating interest, is an appealing one. Furthermore, via this new shareholding we gain exposure to Solo's exploration and production Tanzanian gas assets. This conditional disposal is also estimated to save Primorus circa £175,000 in HHDL cash calls over the next few months based on an overall HHDL budget of circa £4m for the long-term flow tests and associated costs and contingencies.
"Secondly, this disposal allows us to balance up our portfolio in terms of weighting. Over the last 18 months the company has built up a portfolio of investments, many of which are moving rapidly towards IPO. Primorus is not an operating company and thus being involved in a relatively large way directly at a project level reduces the overall liquidity of the portfolio. The Investment Committee thought it an opportune time and price to undertake this rebalancing.
"Lastly, this transaction will provide the Company with further funds to re-invest in its existing portfolio while, as previously flagged, considerably reducing the outgoing HHDL cash calls over the next few months. Finally, by retaining a strategic 5% stake in HHDL, we maintain significant upside in the event of a successful long-term flow test."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please contact:
Primorus Investments plc: |
+44 (0) 20 7440 0640 |
Alastair Clayton |
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Nominated Adviser: |
+44 (0) 20 7213 0880 |
Cairn Financial Advisers LLP |
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James Caithie / Sandy Jamieson |
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Broker: |
+44 (0) 20 3621 4120 |
Turner Pope Investments |
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Andy Thacker |
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