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Neon Energy Limited (ASX:NEN) Completes A$26m Capital Raising

Neon Raises A$26 million to Accelerate Capital Works Program
 
Neon Energy (ASX:NEN) today announced it has successfully raised A$26 million by way of firm commitments received for 104 million shares to institutional and sophisticated investors at A$0.25 per share (the “Placement”).
 
The Placement which was jointly managed by Southern Cross Equities and RBC Capital Markets was supported by domestic and international institutional investors.
 
The Placement to institutional and sophisticated investors will be made in two tranches:
 
- Tranche 1: comprising approximately 48.0 million shares to raise A$12 million to be issued immediately under the Company’s remaining 15% capacity, pursuant to ASX Listing Rule 7.1; and
 
- Tranche 2: comprising approximately 56 million shares to raise a further A$14 million to be issued subject to shareholder approval at a General Meeting of shareholders to be held on or about Wednesday 20 April 2011. A Notice of Meeting will be sent to shareholders in due course.
 
The funds raised will be used to finance oil and gas exploration programs in Vietnam and California. Neon has a significant and diverse portfolio of assets which offer potential for early value creation on multiple fronts.
 
Neon Energy Managing Director and Chief Executive Officer Ken Charsinsky said there was strong support for the raising from international and domestic investors.
 
“The fact we have been able to attract high level institutional support is testament to the quality of the work program in front of us over the next twelve months. As part of the placement we are pleased to announce that London based fund manager BlueGold Global Fund LP (“BlueGold”) has subscribed for 60 million shares which will see BlueGold have a 14% interest in Neon on completion of the placement.
 
“The decision was either continuing to fund our South East Asian exploration activity through our US oil production, or fast-track a pipeline of activity by bringing new shareholders to Neon’s share register.
 
“We are an E&P company with no debt, profitable production, and a diverse portfolio of assets. These funds will allow Neon to enhance cashflow from the US business and maximise exposure to highly prospective drilling opportunities offshore Vietnam, as we are encouraged by the recently acquired seismic data from Blocks 120 and 105.
 
“Neon is operating in a dynamic and highly competitive environment, and the injection of new capital will allow the company to move quickly and decisively on opportunities across our portfolio.
 
“It is also pleasing to announce that subject to shareholder approval at next month’s extraordinary general shareholder meeting, the entire board of directors will participate in the placement.”
 
New shares issued under the Placement will rank equally with Neon’s existing shares.
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