Baraka Petroleum Ltd has engaged Royal Bank of Canada to act as lead manager for an institutional placement of up to $35 million in ordinary shares in an effort to broaden its ownership.
Baraka Petroleum Ltd has engaged Royal Bank of Canada to act as lead manager for an institutional placement of up to $35 million in ordinary shares in an effort to broaden its ownership.
As part of the transaction, Paterson Securities Ltd will co-manage the placement of $10.5 million of Baraka shares to sophisticated and institutional investors in Australia.
The placement will be offered to institutional investors in Australia, Asia, Europe, the United Kingdom, USA and Canada.
In addition to the placement agreement, RBC will also manage a facility to purchase up to 50 million maturing escrow shares from Baraka shareholders released from escrow on 16 May 2006.
Baraka Deputy Chairman Shane Doherty said "the capital raising represented an opportunity for Baraka to broaden its share register, through the introduction of institutional and international investors willing to support the Company as it advances its oil & gas exploration and development activities in West Africa."
Baraka will be conducting a series of investor road shows for institutional and international clients of RBC and Patersons, both in Australia and overseas.
The placement requires the approval of Baraka shareholders and a General Meeting of shareholders will be held on the 15 June 2006.
At 1030 WST, shares in Baraka were priced at 28.5 cents.
Below is the full announcement:
Baraka Petroleum Limited (ASX: BKP) today announced it had engaged Royal Bank of Canada (RBC) to act as lead manager for the institutional placement of up to AUD$35 million in ordinary shares of the Company. As part of the transaction, Paterson Securities Limited (Patersons) will co-manage the placement of AUD$10.5 million of Baraka shares to sophisticated and institutional investors in Australia.
Following strong expressions of interest in the Company from international investors, the placement will be offered to institutional and sophisticated investors in Australia, Asia, Europe, the United Kingdom, USA and Canada.
In addition to the placement agreement, RBC will also manage a facility to purchase up to 50 million maturing escrow shares from Baraka shareholders released from escrow on 16 May 2006.
Baraka Deputy Chairman Shane Doherty said "the capital raising represented an opportunity for Baraka to broaden its share register, through the introduction of institutional and international investors willing to support the Company as it advances its oil & gas exploration and development activities in West Africa.
"RBC and Patersons have extensive experience in national and international financial markets. With their support, we expect this capital raising will be successful in introducing significant retail and institutional investors, from Australia and overseas, that are prepared to support the stock.
On the creation by RBC of a facility to trade maturing escrow shares, Mr Doherty said: "This facility will allow escrowed Shareholders the means to sell-down maturing escrowed stock in an orderly manner having full regard to market conditions and disclosure. Our objective is to alleviate potential residual market over-hang in the market, while introducing institutional
investors capable of supporting the Company over the long-term".
Raising Positions Baraka as a Significant Player In West Africa Oil & Gas Industry
Max de Vietri, Managing Director and CEO added that the capital raising directly supported Baraka's emergence as a significant player in the oil and gas sector in West Africa.
"We have one of the largest oil and gas exploration assets in the region covering more than 272,000 km2. We have a sound balance sheet, an excellent management team with strong corporate and technical skills and a successful business model," he said.
"The placement will provide us with sufficient capital to progress the Mali projects held by the Company through to 2008 and provide us with options for joint venture contribution to the development of Block 20. At the same time we will maintain our strategy of preserving capital while maximising exploration expenditure on our exploration tenements through farm-outs and
joint ventures".
"Although having listed only a year ago, we have demonstrated our capacity to deliver value to shareholders in a number of areas including the farm-out of Ta11 and 12 to Woodside, the farm-out of CB 20 to CNPCIM, and by undertaking the most comprehensive airborne survey ever of the Taoudeni Basin."
Max de Vietri concluded that " RBC and Patersons have completed an independent due diligence program in conjunction with establishing the combined facilities. The program which had commenced in March 2006 included country visits to Baraka's operations in Mauritania and Mali."
Baraka will be conducting a series of investor road shows for institutional and international clients of RBC and Patersons, both in Australia and overseas.
Shareholder EGM
The placement requires the approval of Baraka shareholders and a General Meeting of shareholders will be held on the 15 June 2006.
