Silvermere in default on well commitments after subscriber fails to pay

Shares in Silvermere Energy dropped on Tuesday after the company informed investors its loan repayments and therefore commitments to a well were under threat after an existing shareholder who subscribed for 1.2m shares failed to honour his commitment.

Shares in Silvermere Energy dropped on Tuesday after the company informed investors its loan repayments and therefore commitments to a well were under threat after an existing shareholder who subscribed for 1.2m shares failed to honour his commitment.

The investor subscribed for shares were worth £80,000, and the unpaid subscription has had a material effect on the company's available cash resources. The subscription was part of a larger transaction to raise £371,000.

The company, which has an unsecured convertible loan of £750,000, the repayment of which is due on July 1st of this year, said it is now dependent on the support of its directors and creditors.

Silvermere also said it has received a notice of default on its 'significant' outstanding financial commitments on the I-1 well, which could prejudice its interest in the well.

In a statement the group explained: "An existing shareholder who subscribed for £80,000 worth of shares has subsequently failed to honour his irrevocable commitment to pay for them despite repeated verbal and written assurances to both the company and its advisers that such funds were being or had been remitted directly or indirectly to the company.

"That subscriber's 1,200,001 subscription shares in the capital of the company have, however, already been admitted to trading on AIM. Silvermere has accordingly now instructed its lawyers to pursue the defaulting subscriber for the amount owed."

The share price fell 57.5% to 2.12p by 15:00 Tuesday.

NR

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