Barryroe to raise up to €20m in share sale as key lease awaited

Barryroe Offshore Energy said on Thursday it plans to raise up to €20 million through a share sale in order to put itself on “a solid financial footing for the foreseeable future”, as it continues to wait for Government approval to progress its key project off the Cork coast.

The share sale will be by way of a proposed placing and open offer to investors who did not participate in a recent €40 million convertible loan-note fundraising.

“Taken together, both fundraisings will place the company on a solid financial footing for the foreseeable future,” said Barryroe chief executive Alan Curran. “We now look forward to progressing the Barryroe project, especially to the grant of the lease undertaking by the Minister, so that we can expedite the necessary appraisal well preparations.”

Barryroe, formerly known as Providence Resources, filed an application with Minister for the Environment Eamon Ryan’s department two years ago for a lease undertaking to progress its Barryroe oil and gas prospect, 50km off the coast of Cork. The site was found a decade ago to have more than 300 million barrels of recoverable oil.

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Major company shareholder Larry Goodman agreed to provide a €40 million funding backstop by way of loan notes that can be converted into shares in two years, to address department concerns that Barryroe did not have the financial capacity to progress work on the site by drilling necessary appraisal wells.

Barryroe confirmed last week that Mr Goodman’s Vevan investment vehicle had agreed to share the €40 million funding line with other big shareholders.

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It is believed that businessman Nick Furlong and his Pageant Holdings vehicle, which combined own about 12.7 per cent of Barryroe, and London-based hedge fund Kite Lake Capital Management, which holds a 10.2 per cent stake, are among substantial shareholders that have signed up to participate in the funding line, by way of loan notes that are ultimately convertible into equity.

Barryroe said that it will issue a circular on April 28th, giving more details on the fundraisings in advance of an extraordinary general meeting on May 25th.

The new shares will be offered at 1.5 cent each, the same price at which holders of the convertible notes will be able to swap their securities for ordinary shares in the future.

A placing of as much as €12 million of shares will be open to so-called qualifying professional investors who did not participate in the convertible loan note deal.

The remaining €8 million is to be raised through an open offer to all other current shareholders who hold their stock in electronic form.