GRAND CAYMAN, CAYMAN ISLANDS–(Marketwired – April 29, 2016) –
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Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) (“Tethys” or the “Company”) announces that is has entered into a binding investment agreement (the “Investment Agreement”) with Olisol Investments Limited (“Olisol”) setting out the terms and conditions upon which Olisol Petroleum Limited, a wholly-owned subsidiary of Olisol (“OPL”), has agreed to purchase 181,240,793 new ordinary shares in Tethys (“Shares”) at a price of C$0.054 per Share, for total proceeds of C$9,787,003, by way of a private placement (the “Placing”) and to commit to backstop a further equity fundraising of 50 million Shares at C$0.054 per Share (the “Further Financing”, together the “Transaction”). The Further Financing will generate proceeds of C$2,700,000 for a total of C$12,487,003 under the Transaction. The Investment Agreement amends and restates the investment agreement that was signed by the Parties on December 7, 2015.
Currently, there are 400,004,848 Shares outstanding, of which, Olisol owns 63,044,461 Shares or approximately 15.8% of the outstanding Shares. All of the Shares held by Olisol were issued on the previously announced conversion at US$0.10 per Share of US$6,304,446 of the outstanding indebtedness under the Facility Agreement entered into with Olisol on November 19, 2015, as amended on March 2, 2016 (as amended, the “Facility Agreement“).
Following the Placing (181,240,793 Shares) there will be 581,245,641 Shares in issue, of which Olisol will own 244,285,254 Shares or approximately 42.0% of the outstanding Shares. In addition, Olisol has the right to convert the remaining US$1 million aggregate principal amount plus accrued but unpaid interest under the Facility Agreement into Shares at a conversion price of C$0.054 per Share. As part of the Investment Agreement, Olisol is committing to fund working capital requirements of the Company until closing of the Placing and completion of a US$10 million loan, subject to certain conditions. Amounts advanced under this obligation will also convert at C$0.054 per Share.
Placing and Further Financing
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
Olisol has advised that it will pursue the Transaction through its wholly-owned subsidiary Olisol Petroleum Limited. Olisol and its subsidiaries and affiliates have investments in energy and oil & gas operations in the Russian Federation and Kazakhstan. Olisol is incorporated under the laws of Cyprus and is headquartered in Almaty, Kazakhstan.
Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of the Company or its officers with respect to the Placing. The Further Financing, any advance of working capital indebtedness and the amendment of the Articles or receipt of a US$10 million loan. When used in this document, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should” and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements including with respect to completion of the Placing, the Further Financing, any advances of working capital indebtedness, the amendment to the Articles or receipt of a US$10 million loan, and receipt of proceeds, required shareholder approval and required regulatory approvals, use of proceeds, and, effective implementation of the agreed form Relationship Agreement.
The forward-looking statements are based on the following assumptions: that the Placing and Further Financing and amendments to the Articles will be completed and all shareholder and other required approvals will be obtained and that conditions will be fulfilled and funds received under the Investment Agreement or relating to any request for working capital indebtedness within anticipated timeframes.
No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company or any other entity, and shareholders of the Company are cautioned not to place undue reliance on the forward-looking statements. Save as required by the Listing Rules and applicable law, the Company does not undertake to update or change any forward-looking statements to reflect events occurring after the date of this announcement.