03 October 2014, News Wires – London-listed Range Resources has signed a memorandum of understanding which will see it receive a $50 million funding boost from Chinese institutional investor Core Capital Management.
Under the terms of the MoU, Core Capital will pay about $20 million to subscribe for ordinary fully paid shares of Range at a price of £0.01 (US$0.02) per share, representing a premium of about 26% to the mid-market share price at the close of business on Friday.
Core Capital will also provide convertible bonds with a total value of about $30 million, which convert at a price of £0.01 per share.
“The proposed financing puts Range on a firm footing and allows us to repay existing debt, as well as progress our rig maintenance, development and exploration programmes in Trinidad, which will in turn lead to significant production increases,” said Range chief executive Rory Scot Russell.
“The MoU also provides scope for the acquisition of new assets to complement and enhance Range’s core portfolio. Importantly, the funding enables us to move forward into the next phase of implementation of our waterflood projects working with our technical and strategic partner, LandOcean Energy Services.”
The deal is still subject to regulatory and shareholder approvals, but if it moves ahead Core Capital will have the right to nominate up to two non-executive directors to Range’s board.
Range said on Monday that completion of the deal was expected to take place within 40 days of the 1 November.
Avanti Advisors acted as Range’s financial advisor on the deal