Nu-Oil and Gas (LSE:NUOG) has said it is unable to announce whether or not it will be able to complete its recent £2m fundraise following the insolvency of its former broker Beaufort Securities last week. The oil and gas company had announced plans to raise £2m last Thursday to support the development of its field strategy and strengthen its financial position in a placing arranged by Beaufort. In a shock announcement just one day later, the FCA said that it had declared Beaufort and its sister firm Beaufort Asset Clearing Services insolvent following allegations of fraud and money laundering in the US.
Speaking on behalf of Nu-Oil, which has temporarily appointed Strand Hanson as its broker, executive chairman Alan Minty said the firm is working to determine the most appropriate course of action going forward.
‘The company’s preference is to complete the agreed fundraise but we will require guarantees that the transaction can be concluded without any exposure to the company and this is what we are actively seeking,’ he said.
‘This is a priority and any alternative action we take must be predicated on knowing whether the fundraise can be completed; we do not intend to take precipitate action which may have unforeseen consequences and I would emphasise that the Company controls the stock which was to be allotted for the fundraise.’
‘We are unable to announce whether the placing will continue at this time, but we expect to know soon and will update the market accordingly.’
Minty added that he does not expect the fundamentals of Nu-Oil’s business, its opportunities, or its ongoing activities to be affected by the delay in ‘any way which cannot be managed’.
He also said the business is actively seeking to appoint a permanent broker to replace Beaufort and hopes to announce an update to the market shortly.
‘I trust that it goes without saying that shareholders know we will ensure this temporary issue will not distract us from our objective to conclude negotiations on our first marginal field project,’ he added.
Nu-Oil is not the only business to have a placing hit by Beaufort’s administration. Last Friday, Kibo Mining (LSE:KIBO) announced that it is yet to receive any proceeds from a £750,000 placing arranged by Beaufort. This marked the second time the Tanzania-focused mineral exploration and development company has fallen prey to an insolvent broker. In March 2015, it carried out a £750,000 placing through Hume Capital, which went into insolvency just days later.
Author: Daniel Flynn
Disclosure: The author of this piece does not hold shares in the company mentioned