Shares in Perth-based oil and gas company Range Resources gained nearly 10 per cent on the ASX after it announced it had attracted the backing of Hong Kong-based institutional investment group Abraham.
Range said Abraham would subscribe for $US12 million worth of the company’s shares, at £0.01 per share, representing a premium of approximately 49 per cent to the mid-market share price on London's Alternative Investment Market.
Abraham will be issued about 712 million Range shares, equating to a stake of around 15 per cent of the company once the transaction is settled.
The funds will be used to repay existing debt of about $US10.5 million and remaining proceeds to be used for general working capital of the company.
“The $US12 million subscription will allow us to refinance the expensive and dilutionary corporate debt and provide working capital as we move forward with Range’s operational and long-term financing objectives,” Range chief executive Rory S Russell said.
The subscription will occur in two equal tranches, both worth $US6 million.
Range will also issue about 237 million options to Abraham, half of which will be at the exercise price of £0.01 and half at £0.02.
The company’s shares rose as high as 1.5 cents following the announcement, before slipping back to close at 1.2 cents.
Range Resources’ flagship project is three oil and gas exploration licences in Trinidad, while it also holds assets in Guatemala, Georgia, Texas and Colombia.
