UMC Energy announces that, following discussions with its major shareholder, Natasa Mining Ltd ("Natasa"), the Company is intending to put to shareholders proposals to cancel the admission of its ordinary shares (the "Ordinary Shares") to trading on AIM ("De-listing").
The principal activity of the Company is investment directly and indirectly in, and the operation of, resource exploration and development projects. Presently the Company's main undertaking is the development of the Papua New Guinea petroleum project (the "Project"), in which the Group holds a 30 per cent. equity interest, which is cost-carried to production. The remaining 70 per cent. interest in the Project licences is held by CNOOC Limited which is also the operator of the Project licences. As such, the Company's interest is relatively passive with operating progress of the Project under the control of CNOOC, albeit with the Company playing an advisory role and having significant influence over policy decisions.
The Company has for many years now been dependent on loan funds being made available to it by its major shareholder, Natasa, to meet its working capital and other requirements.
Over the past several years, the Company has undertaken activities aimed at raising additional equity capital. For various reasons, notably, the relatively early stage of the Project, these endeavours have not proved successful. These endeavours have been made more difficult by the decline in the oil price on commodity markets over the period since about June 2014.
Recently, Natasa has advised the Company that while it is prepared to continue to fund the personnel and general office costs of the Company, it is not prepared to continue indefinitely to fund the costs incurred by the Company by virtue of its shares being admitted to trading on AIM. Accordingly, the Company has been required specifically to consider whether retaining admission of its shares to trading on AIM is in the best interests of shareholders and if it is deemed to be so, how it will finance these costs.
The Board believes, as a result of the general conditions within the resources sector and the limited liquidity of the Company's shares, that the costs associated with the Company's listing on the AIM market exceed the benefits of maintaining such a listing and can no longer be justified in light of the current challenging environment and the tightly held nature of the Ordinary Shares.
Accordingly, the Directors believe the De-listing to be in the best interests of the Company's shareholders as a whole. Particular consideration has been given by the Board to the very low liquidity in the Company's shares.
Natasa holds 41.34 per cent. of the Company's issued shares and has indicated that it intends to remain a shareholder in the Company post the De-listing and intends to vote in favour of the De- listing.
Following the De-listing, it is not intended that there will be any market facility for dealing in the Ordinary Shares and no price will be publicly quoted for the Ordinary Shares, nor will the Company be required to announce material events or financial results. In addition, it is intended that the
Depositary Interest and CREST facility will be cancelled which will significantly impact shareholders' ability to trade in the Company's shares. The Company will endeavour to facilitate trading in the Ordinary Shares among any remaining Shareholders in due course, but cannot make any assurances that a purchaser will be available or as to the price which may be agreed.
The Company is seeking to effect the De-listing in early April 2016 and, therefore, a circular to shareholders convening a general meeting of the Company at which the De-listing will be proposed, will be despatched shortly.
UMC Energy Corporation Chrisilios Kyriakou, Chairman | +44(0) 20 3642 1633 |
Strand Hanson Limited Angela Hallett / James Spinney | +44 (0) 20 7409 3494 |
UMC Energy Corp. issued this content on 04 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 06 March 2016 23:09:27 UTC
Original Document: http://www.umc-energy.com/doc/100/raw.html