11 March
2024
i3 Energy plc
("i3", "i3 Energy",
or the "Company")
Reduction of Capital
i3 Energy plc (AIM:I3E) (TSX:ITE),
an independent oil and gas company with assets and operations in
the UK and Canada, announces that a Notice of General Meeting
(the "Circular") will
be posted to Shareholders on 25 March 2024. The Circular will
contain details of a proposed normal course reduction of capital
(the "Capital Reduction"),
being undertaken to ensure there are sufficient distributable
reserves to facilitate dividend payments in the long term. This
announcement, and the filing by the Company
of a Notice of Meeting and Record Date on SEDAR+,
is made earlier than required by the Companies Act
2006 in the UK in order to satisfy the requirements applicable to
the Company under Canadian securities laws. This Capital Reduction
process is not required to facilitate the payment of the next
quarterly dividend.
Notice of General Meeting, as
determined by the Companies Act 2006 in the UK (considered a
Notice of Special
Meeting for the purposes of Canadian
securities laws, as determined in
accordance with National Instrument 54-101 - Communication with
Beneficial Owners of Securities of a Reporting
Issuer) ("NI 54-101").
The Circular will be available on
the Company's website at https://i3.energy
on the anticipated date of posting, 25 March 2024,
and will be mailed to UK shareholders where it has been requested
and to Canadian shareholders in accordance with applicable Canadian
securities laws. The Circular will also be filed under the
Company's profile on SEDAR+ at www.sedarplus.ca.
The General Meeting ("GM") is to be held at the offices of W
H Ireland Limited at 24 Martin Lane, London, EC4R 0DR at 11 a.m.
(BST) on 15 April 2024. The General Meeting will be a "special
meeting" for the purposes of NI 54-101.
Shareholders are strongly encouraged
to appoint the Chair of the meeting as their proxy for the GM. This
will ensure that your vote will be counted even if attendance at
the GM is restricted, or you are unable to attend.
Shareholders should refer to the Circular for
detailed instructions as to how they may submit their proxy for the
GM.
The results of the votes on the
resolution proposed at the GM will be announced as soon as
practicable after the conclusion of the GM and will be available on
the Company's website.
Proposed Capital Reduction
The Board considers it highly
desirable that the Company has the maximum flexibility to continue
the payment of dividends in line with its dividend policy and
otherwise to return value to Shareholders. The capacity of a UK
company to make distributions is restricted by the sufficiency of
distributable reserves. The Board considers that it is to the
benefit of shareholders that the significant value in the Company
and its subsidiary undertakings (the "Group") is reflected in the
parent company balance sheet and is represented by distributable
profits to facilitate a sustainable dividend policy.
The Company has transitioned to
UK-adopted international accounting standards ("UK-IFRS") in its
parent company accounts for the year ended 31 December 2023, which
is the same reporting framework applied in the consolidated Group
accounts. Under the transitional provisions of UK-IFRS the Company
has restated its investment in i3 Canada to fair value as at the
date of transition, and this remeasurement has given rise to a
reserve in equity, being the Transition Reserve. The Transition
Reserve is an unrealised profit and, as such, does not form part of
the Company's distributable reserves.
The adoption of UK-IFRS in the parent
entity accounts has no impact on the consolidated financial
statements of the Group.
It is therefore proposed
that:
a.
the amount standing to the credit of the Transition Reserve
of £148,517,000 is capitalised by way of a bonus issue of newly
created capital reduction shares with a nominal value of £0.0001
and share premium of £0.1234 for each share;
b.
the newly created capital reduction shares are cancelled by
way of a Court-approved reduction of capital; and
c.
£148,396,755, being the amount standing to the credit of the
Company's share premium account following the capital reduction
bonus issue, is cancelled.
This is expected to increase
distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where
justified by the profits of the Company, or to allow the redemption
or buy-back of the Company's shares (or other distributions to
Shareholders).
If the proposed Capital Reduction is
approved by Shareholders at the GM, it will be subject to the
scrutiny of, and confirmation by, the High-Court of England and
Wales (the "Court") which will take due
account of the protection of creditors and, subject to that
confirmation and registration by the Registrar of Companies in
England and Wales of the order of the Court, is expected to take
effect later this year.
The Board anticipates that this will
result in the creation of distributable reserves, however this is
subject to: (i) there being no materially negative change in the
financial position or prospects of the Company; and (ii) any
provision that the Court requires the Company to make for the
protection of its creditors (although the Board does not expect any
undertakings or similar measures to be required). This will give
the Company the maximum flexibility to consider the payment of
dividends and otherwise return value to Shareholders, should the
Board consider it appropriate. It should however be noted
that if the Company is required to give undertakings to the Court,
this may delay the Company's ability to pay dividends and otherwise
return value to Shareholders.
There will be no change in the number
of Ordinary Shares in issue (or their nominal value) following the
implementation of the Capital Reduction and no new share
certificates will be issued as a result of the Capital Reduction.
The Capital Reduction itself will not involve any distribution or
repayment of capital or share premium by the Company and will not
reduce the underlying net assets of the Company. The distributable
reserves arising on the Capital Reduction will, subject to the
discharge of any undertakings required by the Court as explained
below, support the Company's ability to pay dividends.
The Directors reserve the right to
abandon or discontinue any application to the Court for
confirmation of the Capital Reduction if the Directors believe that
the terms required to obtain confirmation are unsatisfactory to the
Company or if, as the result of a material unforeseen event, the
Directors consider that to continue with the Capital Reduction
would be inappropriate or inadvisable.
A detailed description of the
business to be conducted at the GM will be provided in the
Circular.
Notes
1. All times shown are London times
unless otherwise stated.
Enquiries:
i3 Energy
plc
Majid Shafiq (CEO)
|
c/o Camarco
Tel: +44 (0) 203 757 4980
|
|
|
WH Ireland
Limited (Nomad and Joint Broker)
James Joyce, Darshan Patel
|
Tel: +44 (0) 207 220 1666
|
|
|
Tennyson
Securities (Joint Broker)
Peter Krens
|
Tel: +44 (0) 207 186 9030
|
|
|
Stifel Nicolaus
Europe Limited (Joint Broker)
Ashton Clanfield, Callum Stewart
|
Tel: +44 (0) 20 7710 7600
|
|
|
Camarco
Andrew Turner, Violet Wilson, Sam
Morris
|
Tel: +44 (0) 203 757 4980
|
Notes to Editors:
i3 Energy is an oil and gas Company with a low
cost, diversified, growing production base
in Canada's most prolific hydrocarbon region,
the Western Canadian Sedimentary Basin and appraisal
assets in the North Sea with significant
upside.
The Company is well positioned to deliver future
growth through the optimisation of its existing high working
interest asset base and the acquisition of long life, low decline
conventional production assets.
i3 is dedicated to responsible corporate
practices and the environment, and places high value on adhering to
strong Environmental, Social and Governance ("ESG") practices. i3
is proud of its performance to date as a responsible steward of the
environment, people, and capital management. The Company is
committed to maintaining an ESG strategy, which has broader
implications for long-term value creation, as these benefits extend
beyond regulatory requirements.
i3 Energy is listed on the AIM market of
the London Stock Exchange under the symbol I3E and on
the Toronto Stock Exchange under the symbol ITE. For
further information on i3 Energy please
visit https://i3.energy/.
This announcement contains inside information
for the purposes of Article 7 of the UK version of Regulation (EU)
No 596/2014 which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public
domain.
Cautionary Statements
Regarding Forward Looking Information
Certain statements and information contained in this
announcement and other continuous disclosure documents of the
Company referenced herein, including statements and information
that contain words such as "could", "should", "can", "anticipate",
"expect", "believe", "will", "may", "continue", "proposed" and
similar expressions relating to matters that are not historical
facts, constitute "forward-looking information" within the meaning
of applicable Canadian securities legislation. These statements and
information involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements and information. The Company believes the expectations
reflected in such forward-looking statements and information are
reasonable, but no assurance can be given that these expectations
will prove to be correct. Such forward-looking statements and
information included in this announcement should not be unduly
relied upon. These forward-looking statements and information speak
only as of the date of this announcement.
In particular, forward-looking information and
statements in this announcement include, but are not limited to the
following:
• the
expected timing of the Circular and of the results of the Company's
GM;
• the
anticipated benefits of the Capital Reduction;
•
expectations regarding proceedings before the Court in respect of
the Capital Reduction, including the timing of any required
approvals; and
• the
Company's expectations regarding its ability to create and increase
distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where
justified by the profits of the Company, or to allow the redemption
or buy-back of the Company's shares (or other distributions to
Shareholders).
The forward-looking information and statements made
in this announcement rely on certain expected economic conditions
and overall demand for the Company's services and are based on
certain assumptions. The assumptions used to generate this
forward-looking information and statements are, among other things,
that:
• the
Company will maintain its financial position and financial
resources will continue to be available to the Company;
•
demand for the Company's products and services will remain
consistent;
•
there will not be significant changes in the Company's financial
position due to pricing changes driven by market conditions,
competition, regulatory factors or other unforeseen factors;
and
• the
Company will obtain requisite approvals required to realize the
perceived benefits of the Capital Reduction.
Risks and other uncertainties that could cause actual
results to differ materially from those anticipated in such
forward-looking statements include, but are not limited to:
political and economic conditions; industry competition;
price fluctuations for oil and natural gas and related products and
services; the availability of future debt and equity financing;
changes in laws or regulations, including taxation and
environmental regulations which may adversely impact the Company;
extreme or unsettled weather patterns; and fluctuations in foreign
exchange or interest rates.
Readers are cautioned that the foregoing factors are
not exhaustive. Additional information on these and other factors
that could affect the Company's operations and financial results is
included in reports filed on the Company's website. The
forward-looking statements and information contained in this
announcement are expressly qualified by this cautionary statement.
The Company does not undertake any obligation to publicly update or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, except as
may be required by applicable securities laws.