TRP – Completion of Bridging Loan and Issue of Warrants

Tower Resources plc (the “Company” or “Tower” (TRP.L, TRP LN)), the AIM listed oil and gas company with its focus on Africa, is pleased to announce that, further to the Company’s announcement earlier today outlining the proposed interim financing, the Company has successfully agreed a Bridging Loan Facility (“Bridging Loan”) of US$750,000 with a single lender. The terms of the Bridging Loan include the issue of 90 million of attached five-year 1.0 pence warrants.

As previously disclosed, the purpose of the Bridging Loan is to cover working capital while the Company seeks to finalise funding arrangements for the drilling of the NJOM3 well on the Thali licence in late May 2019.  

Bridging Loan Facility and Issue of Warrants

The Company has agreed a short term senior secured funding facility of US$750,000 with Pegasus Petroleum Ltd, a company beneficially owned by the Company’s Chairman Jeremy Asher.  The material terms of the facility comprise fees of 2%, interest of 1% per month accrued and paid on repayment, a fixed and floating charge over the Company’s assets, and the issue of 90 million 5-year warrants priced at 1.0 pence per share (“Warrants”), which is a premium of 38% over the Company’s closing mid-market share price on 15 April 2019. The Bridging Loan will be due for repayment on or before 30 June 2019 and will have a preferential right of repayment from any future financing secured by the Company.

The issue of Warrants has been summarised in the table below.

Director

Number of Warrants being issued

Total number of Warrants held including this issue*

Shareholding upon exercise of total number of Warrants held

% of issued share capital upon exercise of Warrants

Jeremy Asher

90,000,000†

127,908,865

198,800,360

24.5

Peter Taylor

17,190,413

35,642,139

4.4

Graeme Thomson

15,690,413

20,841,180

2.6

*Warrants are held at different prices

Warrants issued to Pegasus Petroleum Ltd; a company beneficially owned by Jeremy Asher

‡Excludes share options

Related Party Transaction

Jeremy Asher, as a director of the Company, and Pegasus Petroleum Ltd, are considered to be “related parties” as defined under the AIM Rules and accordingly, the Bridging Loan constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.

The Directors independent of the Bridging Loan, being Peter Taylor, Graeme Thomson and David M Thomas, consider, having consulted with SP Angel Corporate Finance LLP, the Company’s nominated adviser, that the terms of the Bridging Loan are fair and reasonable insofar as the Company’s shareholders are concerned.

Peter Taylor, Non-Executive Director, commented:

“This funding facility provides additional working capital which we need to complete the well financing process. Our Chairman’s participation reflects his continuing confidence in the Company and in our Cameroon project.”