Providence to issue new shares after delayed fund transfer lands in account

PROVIDENCE Resources says a transfer of funds due from Norwegian group SpotOn Energy has arrived, having been delayed for a week. The company will now issue new shares to the investor.

The troubled Irish explorer received an initial £300,000 (€334,300) from SpotOn last month as part of a €3m fundraising.

SpotOn committed to invest a further £200,000 within six weeks of that announcement, but the second instalment was delayed by a week. That setback inevitably prompted comparisons to last year’s long-running delays in the transfer of a promised $9m loan from Chinese company Apec which never arrived.

However, Providence has confirmed the £200,000 second instalment from SpotOn Energy has arrived into the company’s accounts.

Providence Resources has now therefore issued 6,116,208 of new shares to SpotOn at an issue price of 3.27p each – the closing price on the London Stock Exchange on May 21, the date funds were originally expected to be received.

Providence said the most recent delay was a result of Covid-19-related restrictions, saying SpotOn “had experienced some delays in closing out the necessary arrangements with its consortium because of current working and travel restrictions”.

As part of the deal with SpotOn Energy – in relation to the farm-out of Standard Exploration Licence 1/11, which contains the Barryroe oil and gas field – SpotOn has been given a period of exclusivity until October 31 in respect of the licence.

In January, Alan Linn, an oil and gas veteran with more than 35 years’ experience in the sector, took over the reins of Providence following the resignation of Tony O’Reilly Jnr at the end of last year.

The group has since implemented a number of cost-cutting measures, including redundancies, and now operates with a skeleton staff.