The TomCo Energy Plc (LON: TOM) share price crashed 28.6% after announcing that it had raised £925,000 by placing 264,285,714 new ordinary shares priced at 0.35p each. Investors' adverse reaction to the announcement was aligned with the 27% discount offered to the new shareholders.
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Many were not pleased by the significant discount offered during the placement. The new shares constitute about 11.77% of the company’s enlarged share capital. The detailed report also revealed that the company had extended the deadline to exercise over 388 million warrants issued in November 2020 during another placing.
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At the time, participating investors had up to 30 November 2022 to acquire one new ordinary share in TomCo Energy at 0.9p each, but they are yet to do the same. The company has extended the deadline to 31 March 2023. The exercise of the warrants at 0.9p would raise a further £3.5 million for the company.
Furthermore, TomCo Energy is currently negotiating with potential funding partners to raise the $16.25 million needed to acquire the remaining 90% stake in the Tar Sands Holdings II LLC (TSHII) site in Utah, United States. The company currently owns a 10% stake in the project through its wholly-owned subsidiary Greenfield Energy LLC.
However, the company wants to raise funds via a non-equity option and is open to selling a significant stake in the project to those who partner with it in acquiring the remaining stake.
TomCo is keen to ensure that any funding agreement reached with its backers includes a provision for constructing two oil sand separation plants that can process a minimum of 6,000 tonnes of oil sands daily combined with at least 14 in-situ oil recovery wells.
The company said it would provide more details about the negotiations in due course, but there are no guarantees that a funding deal will be reached before the deadline. TomCo also noted that Valkor had agreed to extend the repayment deadline for the $1,000,000 principal amount of the loan advanced to it in November 2021.
Tomco’s update had negative and positive aspects, but investors have a lot to look forward to.
*This is not investment advice.
TomCo Energy share price.
The TomCo Energy share price crashed 28.63% to trade at 0.344p, falling from Tuesday’s closing price of 0.482p.
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