Elixir Petroleum Limited proposed an issue of 8,571,429 convertible notes at a subscription price of $0.35 raising a total of $3.0 million before expenses.
Funds raised are expected to be applied primarily toward drilling and development activities at Elixir's Pompano gas project and for general working capital purposes.
The Notes will be issued to Macquarie Bank Limited without disclosure under section 708 of the Australians Corporations Act. Shareholder approval is not required for the issue, which is within the 15% limit available to the Company under ASX Listing Rule 7.1. The Notes will not be quoted on the ASX or AIM.
The Notes are convertible, at the election of the Noteholder, at a price of $0.35 per share at any time up until 31 December 2008 or are redeemable at face value plus interest on 31 January 2009. The Notes are unsecured and accrue interest at 10% per annum on face value.
"Our cashflow comfortably services these notes with more than US$800,000 of proceeds from October production at High Island received during January and receipts for November production being imminent," Chairman of Elixir Jon Stewart said. "At a time when our existing cash balances are being put toward our current drilling activities, this new funding gives us additional working capital to put toward further drilling and development activities that would follow a successful initial well at Pompano."
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