Sound Energy has entered into an agreement for the early redemption of an existing loan with a view to simplify its balance sheet and saving the company the cost of the final interest payment.
The agreement provided for the early redemption of an existing £1m loan originally provided by Simon Davies, a former director of the company.
It also provided for the simultaneous exercise of 9.6m warrants held by Davies to subscribe for new shares in the company at 10.4p each.
The loan, originally provided by Davies in January 2014, had a 10% coupon and a maturity date of 28 July 2017.
“Under the Deed of Release and Variation, the Loan will now be redeemed in full and cancelled on 1 April 2017 (the “Effective Date”), saving the Company approximately £32,000 in interest which would otherwise have been due under the loan,” the company said.
The warrants would be automatically simultaneously exercised on the effective date, resulting in the issue of 9.6m new shares to Davies.
“The payment of the aggregate subscription price of £1m for the exercise of the warrants will be deemed satisfied on the redemption and cancellation of the loan,” said Sound Energy in a statement.
All security previously provided under the loan would be released on the effective date.
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