Sound Oil, the Mediterranean focused upstream oil and gas company, announced the successful completion of due diligence and the signing of investment agreements in respect of the £14 million Institutional funding announced by the Company on 25 April 2014 and expected to be completed in July 2014.
Continental Investment Partners SA, acting on behalf of itself and affiliates has now successfully completed due diligence and signed the investment agreements, including a 50/50 debt/equity split which results in a total investment of £14 million at an average price of approximately 9.2 pence per share.
Metano Capital SA, a subsidiary of Continental Partners SA, has subscribed for £7 million of new ordinary shares in the Company at a price of 8 pence per share subject to approval by the Company's shareholders at the AGM on 25 June and to completion of the debt component of the transaction. On completion, Metano Capital SA will be interested in 87,500,000 Ordinary Shares in the Company, representing 21.07% of the Company's issued ordinary share capital, as enlarged by the Subscription. Metano have agreed to an 18 month lock-in period for half of the shares to be subscribed for and a 12 month lock-in period for the other half.
The Investor has also, conditional on the finalization of ancillary documentation and the Loan Conversion and Warrant Issue described below, subscribed for the remaining £5.5 million loan notes (see note below) and 52,884,615 detachable warrants to subscribe for new ordinary shares in the Company at a price of 10.4 pence per share at any point during the period of the loan.
On completion of the issue of the loan notes to the Investor, the existing £1 million loan from Simon Davies, a director of the Company, will convert into a new loan with the same par value, an annual coupon of 10% and repayable 3 years from the date of issue, as previously announced. This will also involve the issue of 9,615,385 warrants to Simon Davies on the same terms as the Investor's warrants (the "Loan Conversion and Warrant Issue").