Block Energy plc has closed a senior secured loan of US$1.06 million (£860,000) with various existing shareholders and two of its management.
RELATED PARTIES
Chief executive officer Paul Haywood provided $90,000 and chief operating officer Ken Seymour provided $100,000 of the loan.
The company said that the funds would give additional headroom to accelerate its Project I development programme at West Rustavi in Georgia.
This will include additional wells and side-tracks, following completion of well WR-B01Za, which is currently being drilled.
TERMS
The 18-month term loan begins on 2 February and carries 16% per annum interest, payable quarterly in arrears in cash.
The company can elect to repay amounts outstanding under the loan at the end of each quarter, in part or in full, subject to a 2% early repayment fee.
Block Energy has provided a debenture to the lenders as security, providing a fixed and floating charge over the company’s property and assets.
Each lender will also receive warrants exercisable at any point during the three years from the closing date, with an exercise price of 1.7 pence per ordinary share.
The number of warrants to be issued to lenders in aggregate is 25,330,249.
The loan facility can be increased up to a maximum of $2m during the term of the loan.