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Providence Resources’ slow-motion capital raise tops £3.3m

Shareholders have pumped another £489,363.24 (€566,000) into Providence Resources, exercising warrants issued a year ago to buy in at three pence a share just ahead of a cut-off date.

he latest purchases take the total raised from the exercise of the three-pence warrants close to £3.3m, nearing the potential maximum.  

The non-executive chairman of Providence Resources, Pat Plunkett, was among those to exercise the latest batch of warrants, taking his stake to 0.394pc of the issued share capital.

Investors have until May 6 to exercise remaining warrants in the same class.

The warrants were issued last year to shareholders who contributed to a €3m capital raise. Each investor received a mix of ordinary shares and the same number of so-called 3p and 9p warrants that give them a right to buy additional shares at those pre-set prices.

Adding the latest near half million pounds to the tally means Providence has raised almost £3m from warrant holders exercising 3p shares last September, including £1m in a deal earlier this week.

The right to exercise the 3p warrants runs out on May 6 any unused options will then lapse. The 9p warrants have another year to run, but Providence shares would have to almost triple in value before they came into play.

Last week, Providence Resources shareholders were told it had terminated an important farm-out agreement with Norway’s SpotOn Energy, which was to have taken over the costs of pressing ahead with exploration in the Barryroe licence area off the coast of Cork.

The farm-out was conditional on SpotOn confirming that a minimum of $166m (€137m) in funding was in place for the early development programme. Shares had been trading at 3.65 pence last week before news the deal was off the table.

The agreement was terminated because “key financing conditions were not met”, Providence said.

Providence is now looking to raise another $5m (€4.1m). Nick Furlong’s Pageant Holdings, already a substantial shareholder, has offered to underwrite a capital raising of $2.5m at 3p per share, under a plan which includes a one-for-one warrant – potentially raising the same amount again over time.

Providence has said it is working on a number of options to further the development of the Barryroe site including payment deferrals by individual service providers and a Nordic bond issue of around $80m.

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