2 September 2016
Highlands Natural Resources plc ('Highlands' or 'the Company')
Issue of Shares and Disposal of Warrants
Highlands, the London listed natural resources company, announces that it has issued an additional 5,000,000 ordinary shares in the Company (the 'New Ordinary Shares') pursuant to the exercise of warrants. The warrants exercised are part of those acquired by an institutional investor (the "Institutional Investor") from Diversion Technologies, LLC ('Diversion'), as announced on 15 June 2016, and which are exercisable into ordinary shares in Highlands at 25 pence per share. Accordingly, as anticipated following that sale, this exercise is a significant event for Highlands and has resulted in the receipt of further new funds of £1.25 million (taking the total new funds received as part of these transactions to £2.50 million).
An application will be made for the New Ordinary Shares to be admitted to trading on the Official List of the UK Listing Authority by way of a Standard Listing and to trading on the London Stock Exchange's Main Market for listed securities ('Admission') and it is expected that Admission will take place on 9 September 2016.
Following the issue of the New Ordinary Shares, the total number of ordinary shares in Highlands with voting rights will be 44,237,349. This figure may be used by Highlands' shareholders as the denominator for calculations to determine if they have a notifiable interest in Highlands under the Disclosure and Transparency Rules, or if such interest has changed.
Disposal of Warrants
Highlands is also pleased to announce that it has been notified by Diversion that Diversion has today sold a further 10 million warrants (the "Warrants") in Highlands to the Institutional Investor. The terms of the potential sale that were announced in June 2016 have been altered such that the Institutional Investor has agreed to pay Diversion an initial consideration of 1 pence per warrant and a deferred consideration equal to one half of the excess of the volume weighted average price ('VWAP') over 30 pence per Highlands share. The VWAP, for the purposes of this agreement is defined as the volume weighted average price of Highlands shares from the date of sale through to the time of exercise of the Warrants by the Institutional Investor. In the event that the Institutional Investor exercises only part of the Warrants, then the VWAP for the next exercise will be the volume weighted average price of Highlands shares as of the date of last exercise through to the date of the next exercise.
In addition, and as part of the terms of this agreement, the Institutional Investor has granted Highlands the right to insist that the Institutional Investor exercises each week such number of Warrants equal to not less than 15 per cent. of the aggregate number of Highlands shares that trade during the previous five trading days at a price equal to or higher than 30 pence per Highlands share. This is a significant benefit to Highlands and its shareholders as, subject to its share price and volume, it provides good visibility on the exercise of the Warrants and the consequent receipt of new funds of £2.50 million (taking the total new funds received as part of these transactions to £5 million).
Disclosure of notifiable interests
Due to the issue of the above New Ordinary Shares, although the number of ordinary shares held by Mr R B Price, CEO of Highlands, has not changed, with effect from Admission his holding represents 27.1 per cent. of the Company's total voting rights.
Mr Price has a beneficial interest in the Warrants as a 37.5 per cent. shareholder in Diversion.
Highlands CEO Robert Price said, "This further sale by Diversion increases the potential new funds for Highlands to £5 million, half of which has now been realised as a result of today's warrant exercise. Not only does this increase the Company's size and liquidity, which in turn should enhance our appeal to a wider investor audience, but we now have the funds to accelerate Highlands' core projects, including the deployment of DT Ultravert, the development of Helios Two and our drilling programme in our Colorado acreage."
This announcement contains inside information.
For further information:
This information is provided by RNS