MIRACH ENERGY LIMITED (the "Company") (Incorporated in the Republic of Singapore) (Company Registration No E)

Transcription

1 MIRACH ENERGY LIMITED (the "Company") (Incorporated in the Republic of Singapore) (Company Registration No E) ANNOUNCEMENT IN RELATION TO: (I) (II) THE PROPOSED PLACEMENT OF 152,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF THE COMPANY; AND THE ENTRY INTO THE TERM SHEET WITH RESPECT TO A PROPOSED GRANT OF A CONVERTIBLE LOAN OF AN AGGREGATE AMOUNT OF UP TO S$36,000, INTRODUCTION 1.1 The board of directors (the "Board") of Mirach Energy Limited (the "Company") is pleased to announce that the Company has entered into the following: (a) (b) a subscription agreement (the "Subscription Agreement") with Tan Ah Ee, Goh Yeo Hwa, Adrich Ng Kim Seng, Ng Lim Huak, Tan Kim Sing, Tan Thiam Chye, Ho Siow Poh, Lim Yi Shenn, Tan Chin Tuan and Teo Choon Leng Jeffrey (each a "Subscriber" and collectively the "Subscribers") on 26 June 2013; and a binding term sheet ("Term Sheet") on 26 June 2013 with Tan Ah Ee, Goh Yeo Hwa, Tan Thiam Chye, Ho Siow Poh, Tan Chin Tuan and Lim Yi Shenn (each a "Lender" and collectively the "Lenders") in relation to the proposed grant by the Lenders of a convertible loan of an aggregate amount of up to S$36,000,000 (the "Loan"), with an option to convert the Loan into fully-paid ordinary shares of the Company ("Conversion Shares") at a conversion price of S$ (the "Proposed Convertible Loan"). The Term Sheet sets out in broad terms the salient terms and conditions in respect of the Proposed Convertible Loan, which will form the basis of the definitive agreement relating to the Proposed Convertible Loan (the "Definitive Agreement"). Further details will be announced in the event the Definitive Agreement is entered into by the Company. 1.2 Pursuant to the terms of the Subscription Agreement, the Company has agreed to allot and issue, and the Subscribers have agreed to subscribe and pay for an aggregate of 152,000,000 new ordinary shares in the capital of the Company (the "New Shares") at S$ (the "Placement Price") for each New Share (the "Proposed Placement"), amounting to an aggregate subscription consideration of S$18,878,400, in the following proportions: Party Number of New Shares Subscription Consideration Payable Tan Thiam Chye 25,000,000 S$3,105,000 Ng Lim Huak 20,000,000 S$2,484,000

2 Tan Kim Sing 15,000,000 S$1,863,000 Ho Siow Poh 15,000,000 S$1,863,000 Tan Ah Ee 15,000,000 S$1,863,000 Goh Yeo Hwa 15,000,000 S$1,863,000 Tan Chin Tuan 15,000,000 S$1,863,000 Lim Yi Shenn 12,000,000 S$1,490,400 Teo Choon Leng Jeffrey 10,000,000 S$1,242,000 Adrich Ng Kim Seng 10,000,000 S$1,242, The New Shares shall be issued as fully paid and shall be free from all claims, charges, liens and other encumbrances whatsoever and will rank pari passu in all respects with the existing ordinary shares of the Company ( Shares ) provided that, subject to completion of the Proposed Placement, the New Shares shall rank for, including without limitation, any entitlements, distributions, dividends or rights, the record date of which falls on or after the Completion Date (as defined in the Subscription Agreement). 1.4 The Placement Price of S$ for each New Share represents a discount of approximately 10% to the volume weighted average of S$0.138 for trades done on the Shares on the SGX-ST for the full market day on 21 June 2013, being the last trading day of the Shares on the SGX-ST on the date of signing of the Subscription Agreement. 1.5 The Company will be making an application to the Singapore Exchange Securities Trading Limited (the "SGX-ST") for the listing and quotation of the New Shares on the Official List of the SGX-ST. The Proposed Placement is conditional upon, inter-alia, the approval of the listing and quotation of the New Shares on the Main Board of the SGX-ST. 1.6 The Board wishes to advise shareholders of the Company ("Shareholders") to read this Announcement in its entirety, in particular the Cautionary Statement set out in paragraph 5 of this Announcement. 2. THE PROPOSED PLACEMENT 2.1 Authority to Issue Shares The New Shares will be issued pursuant to the general mandate given by the shareholders of the Company at the annual general meeting of the Company held on 29 April 2013 to the Directors for the issuance of shares and convertible securities of the Company (the "Existing Share Issue Mandate"). The New Shares to be issued pursuant to the Subscription Agreement represent approximately 19.8% of the issued share capital of the Company as at the date the Existing Share Issue Mandate was given.

3 2.2 Conditions Precedent to the Completion of the Proposed Placement Pursuant to the terms of the Subscription Agreement, completion of the Proposed Placement is conditional upon: (a) (b) (c) in-principle approval for the listing and quotation of the New Shares being obtained from the SGX-ST and not having been revoked or amended and, where such approval is subject to conditions (which are not normally imposed by the SGX-ST for a transaction of a similar nature), such conditions being acceptable to the Subscribers and, to the extent that any conditions for the listing and quotation of the New Shares on the Main Board of the SGX-ST are required to be fulfilled on or before the Completion Date (as defined in the Subscription Agreement), they are so fulfilled; the allotment, issue and subscription of the New Shares not being prohibited by any statute, order, rule, regulation or directive promulgated or issued after the date of the Subscription Agreement by any legislative, executive or regulatory body or authority of Singapore which is applicable to the Company or the Subscribers; and on the Completion Date, the undertakings and warranties of the Company contained in the Subscription Agreement being true, accurate and correct in all material respects as if made on the Completion Date, with reference to the then existing circumstances and the Company having performed in all material respects all of its obligations to be performed on or before the Completion Date. 2.3 About the Subscribers The Subscribers were introduced to the Company by Maincity Investments Limited, a company incorporated in the British Virgin Islands and which is a business advisory firm providing, amongst others, consultancy services. The Company was introduced to Maincity Investments Limited by business associates of the Company and Maincity Investments Limited has no connection with any director or substantial shareholder of the Company. A commission equivalent to four per cent. of the gross proceeds from the Proposed Placement will be paid to Maincity Investments Limited for assisting the Company in the structuring of the Proposed Placement. The Subscribers are individuals who reside in Singapore and who are willing investors who have entered into the Subscription Agreement purely for financial investment purposes. As at the date of this Announcement, each of the Subscribers does not hold, directly or indirectly, any shares in the capital of the Company and it does not have any connection with any director or substantial shareholder of the Company. 2.4 Rationale and Use of Proceeds The net proceeds from the Proposed Placement after deducting estimated expenses, is approximately S$18.1 million. The Company intends to use the net proceeds from the Proposed Placement to redeem the S$16,900,000 in aggregate principal amount of 3.0 per cent. senior convertible bonds due 2014 ("Bonds") issued by the Company to Legend Luso Investment Company Limited and Triple Master Investment Holdings Limited on 27 April 2011.

4 3. THE TERM SHEET 3.1 Principle Terms of the Term Sheet Loan Amount : Grant of a convertible loan of up to S$36,000,000 (the "Loan"), with an option to convert the Loan into fully-paid ordinary shares of the Company. Each drawdown of the Loan shall be in tranches of S$6,000,000 ("Tranche"). Conversion Price : S$ per Conversion Share (as defined below) The Conversion Price represents a discount of approximately 10% to the volume weighted average price of S$0.138 on 21 June 2013, being the last trading day of the Shares on the SGX-ST on the date of the Term Sheet. Conversion Shares : Up to approximately 310,144,928 new shares in the Company ("Conversion Shares"), subject to adjustments of bonus shares and share consolidations etc. Minimum Loan : The Lenders shall make available to the Company, in equal proportions, an aggregate minimum loan amount of S$18,000,000 ("Minimum Loan"), in the one year from the date of the Definitive Agreement ("Minimum Loan Drawdown Period"). Interest (as defined below) payable on the Loan by the Company shall be converted into shares of the Company ("Interest Shares") at the Conversion Price. Option : The Lenders shall have the option of making available to the Company, in equal proportions, a further aggregate loan amount of up to S$18,000,000 ("Upsize Loan"), from the date that the Minimum Sum is drawndown in full, to the Repayment Date ("Upsize Loan Period"). The Company shall be entitled to submit a request to drawdown on the first Tranche of the Upsize Loan at any time during the Upsize Loan Period. If the Lenders do not agree to any requests made by the Company to drawdown on the Upsize Loan during the Upsize Loan Period, the Restriction (as defined below) shall no longer apply and the Company may issue any securities or instruments convertible into or exchangeable for shares in the Company, for cash. Repayment Date : Two years from the date of the first drawdown of the Loan ("Repayment Date")

5 Interest : Seven per cent. on each Tranche ( Interest ) calculated and payable from each drawdown on the Loan. Interest payable on the Loan shall be converted into Interest Shares at the Conversion Price, either upon conversion of the Loan or on the First Conversion Date (as defined below) or on the Repayment Date, whichever is applicable. Conversion : The Loan may be converted into duly authorised, validly issued, fully-paid and unencumbered shares of the Company, at the option of the Lenders: (i) (ii) In respect of the Minimum Loan, at any time, from and including the date of the first drawdown on the Loan ("First Drawdown"), up to one day prior to the date of the first anniversary of the First Drawdown ("First Conversion Date"); and In respect of the Upsize Loan, at any time, from and including the date of first drawdown of the Upsize Loan, up to the Repayment Date. Any (i) outstanding Minimum Loan; and (ii) Interest payable on the outstanding Minimum Loan, which has not been converted into shares of the Company on the First Conversion Date, shall be automatically converted into Conversion Shares and Interest Shares (as the case may be) on the First Conversion Date. Any (i) outstanding Upsize Loan, and (ii) Interest payable on the outstanding Upsize Loan, which has not been converted into shares of the Company on the Repayment Date, shall be automatically converted into Conversion Shares and Interest Shares (as the case may be) on the Repayment Date. Conditions Precedent : Completion of the Proposed Convertible Loan is conditional upon, amongst others: (a) (b) Approval for the Proposed Convertible Loan being obtained from the shareholders of the Company at an extraordinary general meeting to be held by the Company; and in-principle approval for the Proposed Convertible Loan being obtained from the SGX-ST and not having been revoked or amended. Covenants : The Company shall not issue any securities or instruments convertible into or exchangeable for shares in the Company, for cash, for one year from the date of first drawdown of the Loan, without the written prior consent of the Lenders ("Restriction"). This Restriction shall continue to apply for as long as the Lenders agree to the Company's requests to drawdown on the Upsize Loan.

6 Term Sheet Period : The Company and the Lenders shall negotiate in good faith and finalise and enter into the Definitive Agreement no later than 1 month from the date of the Term Sheet or such other date as may be agreed between the Company and the Lenders, failing which the Term Sheet will expire. Governing law : The Term Sheet and the Definitive Agreement shall be governed by the laws of Singapore. Any dispute, controversy or claim arising out of or in connection with the Term Sheet shall be settled by arbitration in accordance with the Rules of the Singapore International Arbitration Centre. Upon signing the Definitive Agreement, the Company will convene an extraordinary general meeting to obtain approval of the Shareholders for the Proposed Convertible Loan. 3.2 About the Lenders The Lenders were introduced to the Company by Maincity Investments Limited, a company incorporated in the British Virgin Islands and which is a business advisory firm providing, amongst others, consultancy services. The Company was introduced to Maincity Investments Limited by business associates of the Company and Maincity Investments Limited has no connection with any director or substantial shareholder of the Company. A commission equivalent to three per cent. of each Tranche of the Loan will be paid to Maincity Investments Limited each time the Loan is drawn down by the Company, for assisting the Company in structuring the Proposed Convertible Loan. The Lenders are individuals who reside in Singapore and who are willing investors who have entered into the Term Sheet purely for financial investment purposes. As at the date of this Announcement, the Lenders have also subscribed for new shares in the capital of the Company pursuant to the Proposed Placement. The Lenders do not have any connection with any director or substantial shareholder of the Company. 3.3 Rationale for the Proposed Convertible Loan The Company intends to use the first Tranche of the Loan (the "First Drawdown") to repay the interest payable in connection with the redemption of the Bonds. The Company and the Lenders have agreed that the Company shall be entitled to the First Drawdown notwithstanding that approval from the shareholders of the Company and/or the SGX-ST for the Proposed Convertible Loan is not obtained at the time of the First Drawdown. The Company intends to use the rest of the Loan to expand the Company's business, including but not limited to, the acquisition of new production oilfields and for working capital purposes. 4. GENERAL None of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the Proposed Placement or the Proposed Convertible Loan (other than through their shareholdings in the Company).

7 None of the New Shares will be placed with any of the persons disallowed under Rule 812 of the SGX-ST Listing Manual. 5. CAUTIONARY STATEMENT 5.1 Shareholders should note that the Term Sheet is subject to the negotiation, execution and delivery of the Definitive Agreement. 5.2 The Board would like to caution that there is no assurance that any transaction will materialise from the Term Sheet or that the Definitive Agreement will be entered into in relation to the Proposed Convertible Loan. Shareholders and investors are therefore advised to exercise caution in their dealings in Shares. BY ORDER OF THE BOARD Chan Shut Li, William Executive Chairman and Chief Executive Officer Date: 26 June 2013