Nu-Oil and Gas (LSE:NUOG) has carried out a fresh £1.5m placing after its fundraise earlier this month was botched as a result of its former broker Beaufort Securities’ high-profile insolvency.
Yesterday’s placing was arranged by Novum Securities, which has been appointed the firm’s new joint broker alongside Strand Hanson. Novum is also the new home of Beaufort’s corporate team following the latter’s collapse in the wake of allegations of fraud and money laundering in the US earlier this month.
The oversubscribed placing saw Nu-Oil issue around 130m new shares at 1.15p each and grant around 13m warrants to Novum that can be exercised within five years at the placing price. At £1.5m, the placing has raised £500,000 less than the £2m fundraise carried out on 1 March via Beaufort. But Nu-Oil said the proceeds will still be enough to cover its working capital requirements and that the company sought to alleviate the dilutive effect of the placing on existing shareholders by reducing the amount raised.
The proceeds will be used to help Nu-Oil acquire marginal field projects and will cover costs such as economic assessment, subsurface due diligence, engineering and design studies. As it stands, no new shares have been issued in connection with the 1 March placing, no settlements have taken place, and no placing proceeds have been received by Nu-Oil. Nu-Oil said it has taken ‘appropriate measures’ to ensure there are no potential material financial obligations for the business related to any agreements made with Beaufort associated with the placing.
Today, Alan Minty, executive chairman of Nu-Oil said: “I am pleased that the company has acted decisively with respect to the issue of the Placing we announced on 1 March. Everyone associated with the company will have known that Beaufort’s insolvency created considerable uncertainty for the company and its shareholders, uncertainty that could have affected many aspects of the plans we are seeking to implement”
“The ultimate objective for the Board throughout this process was to protect shareholder value and consequently the Board decided that a placing should be concluded with as little discount to the original placing price as could be obtained. We have achieved this in extremely challenging circumstances and we are now able to refocus our efforts on operational activities. “
Today’s news comes two weeks after Minty told the market that Nu-Oil would be ‘unable to announce’ whether or not the business will be able to complete its fundraise with Beaufort.
Author: Daniel Flynn
Disclosure: The author of this piece does not hold shares in the company mentioned