Rose Petroleum plc

Intention to raise £1,399,000 by way of a conditional subscription

26-June-2013

Intention to raise £1,399,000 by way of a conditional subscription

VANE today announces its intention to raise £1,399,000 by way of a conditional subscription arranged by its incoming CEO (the “Subscription”).

Summary of the Subscription

  • The Company proposes to raise £1,399,000 (before expenses) by way of a conditional subscription of up to 349,750,000 new ordinary shares of 0.1 pence each ("Subscription Shares") at a price of 0.4 pence per Subscription Share (the “Subscription Price”)
  • The Subscription Shares have been conditionally subscribed for by institutional and other investors (the "Subscribers")
  • The Subscription is subject to the approval of a waiver of Rule 9 of the Takeover Code and the approval of a “whitewash” circular by the Takeover Panel together with the subsequent approval by shareholders of certain resolutions (including the “whitewash”) at a general meeting of the Company, the date of which will be announced at the appropriate time (the "General Meeting"). The net proceeds of the Subscription will be used to assist the Company in investigating possible asset acquisitions as well as for general working capital

Matthew Idiens, incoming CEO, commented: “I am delighted that we are able to announce a proposed subscription to raise £1,399,000. The financing will allow us to pursue our stated desire to investigate potential asset acquisitions and also assist us with our general working capital needs. In these prohibitive financing markets I am grateful for the support the investors have shown by the offer of these funds”

Subscription for 349,750,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") at 0.4 pence per share

Introduction

The Company proposes to raise £1,399,000 (before expenses) through the issue of the Subscription Shares at the Subscription Price. The Subscription Price represents a discount of approximately 5.88 per cent. to the closing mid-market price of 0.425 pence per Ordinary Share on 25 June 2013, being the last dealing day prior to this announcement. Having considered the price at which the Ordinary Shares are currently traded, and other market factors, the directors of the Company (the "Directors") have resolved that the Subscription Price is appropriate. The Subscription Shares will represent approximately 44.12 per cent. of the Company’s issued share capital as enlarged by the Subscription.

The Subscription has been arranged by Matthew Idiens following his recent appointment as CEO of VANE. In view of the fact that the majority of Subscribers (those representing 82.13 per cent. of the Subscription or 36.24 per cent. of the Company's enlarged issued share capital) are viewed to be “acting in concert” (the "Concert Party") within the meaning of The Takeover Code (the "Code"), the Subscription is conditional, inter alia, upon the Takeover Panel giving approval to a waiver of Rule 9 of the Code together with the approval of a “whitewash” circular setting out full details of the proposed waiver of the obligation under Rule 9 of the Code that would otherwise require the Concert Party to make a general offer to all the remaining shareholders of the Company (the "Independent Shareholders") to acquire their shares in the Company ("Whitewash Resolution")

Accordingly, the Subscription is also conditional on: (i) the approval (on a poll) of the Independent Shareholders of the Whitewash Resolution; (ii) the approval of the shareholders generally of resolutions approving the issue and allotment of the Subscription Shares (together with the Whitewash Resolution, the "Resolutions"); and (iii) the admission of the Subscription Shares to trading on AIM. These conditions must be satisfied by 31 July 2013 (or such later dated as may be agreed between the Company and the Subscribers). There can be no guarantee that the “whitewash” circular will in fact be approved by the Takeover Panel or that the Resolutions, to be proposed at the General Meeting, will be approved.

The "whitewash" circular containing a notice of the General Meeting will shortly be prepared and then, once the circular and the waiver of Rule 9 of the Code have been approved by the Takeover Panel, the circular will be sent to Shareholders seeking their approval to effect these proposals. Further announcements will be made at the appropriate time.

Background to and reasons for the Subscription

The Directors believe that there is currently an opportunity to raise funds from a small number of institutional and other investors rather than by offering all shareholders the opportunity to acquire further shares and that this opportunity may not be present in the future given the current uncertain market conditions. The Directors believe that the additional cost and delay incurred in connection with any such offer would not have been in the best interests of the Company.

The proceeds of the Subscription will enable the Company to investigate possible asset acquisitions. At the same time the Directors believe that the Subscription will give the Company sufficient working capital for the next 12 months. However, exploration costs are difficult to predict and if they prove to be higher than anticipated, or in the event of unforeseen circumstances, further capital may be required. There can be no certainty as to the terms or availability of such funding.