- Otto Energy (OEL) has completed a share placement and an institutional entitlement offer totalling roughly $7.8 million
- Further to the nearly $8 million already raised, OEL is seeking to raise another $9.7 million via a retail entitlement offer — sparking concerns from shareholders
- The money will be used to fund the South Marsh Island development well in the Gulf of Mexico, as well as other developments and for working capital
- The company says it’s a tough ask for investors to raise so much capital at this point in time
- However, it believes it’s in the best long-term interests of all stakeholders to ensure OEL has the money to pursue its development and production goals
- Otto is down 37.5 per cent today with shares trading for 0.5 cents each
Gas explorer Otto Energy (OEL) has completed a share placement worth ~$1.4 million and an institutional entitlement offer worth ~$6.4 million.
The monies will be used to fund the reimbursement of its 50 per cent stake in the South Marsh Island development well in the Gulf of Mexico as well as other future developments, and for working capital.
The placement
The placement raised a total of $1.38 million through the issue of approximately 231 million shares at 0.6 cents per share. Shares issued under the placement will rank equally with existing shares on issue and have been allotted to commence trading today.
The Institutional offer
The institutional entitlement offer raised a total of $6.4 million through the issue of approximately 1,074 million shares at 0.6 cents per share. The institutional entitlement offer saw the take-up of 536.9 million shares by institutional investor Molton Holdings in its capacity as an existing institutional investor in the company.
8.3 million shares were issued to other institutional investors through an institutional bookbuild, and 528.7m institutional shortfall shares were issued to Molton in its capacity as sub-underwriter of the entitlement offer.
Shares issued under the institutional entitlement offer will rank equally with existing shares on issue and are expected to be allotted on 8 April.
The retail entitlement offer
Further to the roughly $7.8 million already raised, OEL is seeking to raise another $9.7 million via a retail entitlement offer. The offer is partially underwritten and will be executed through the issue of approximately 1,617 million shares at 0.6 cents per share on the basis of one new share for every one share held as at 7 pm AEST tonight.
The entitlement offer is non-renounceable and entitlements will not be tradeable or otherwise transferrable. The offer extends to shareholders in Australia, New Zealand, the United Kingdom, Hong Kong, Singapore and Cambodia.
The Retail Offer Booklet, containing full details of the entitlement offer, will be sent to eligible retail shareholders on 3 April. The retail entitlement offer will open on April 3 and close at 5:00 pm Sydney time on 16 April (unless extended).
Capital raised to shore up future
The Board have resolved to immediately cut their directors fees by 50% for the next six months.