Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) has executed an investment agreement with DKL Investments Ltd., a wholly owned subsidiary of Delek Group Ltd., in respect of a US$66 million equity investment in the company, in which Delek will acquire a 20% stake in the company.
Highlights of the transaction include:
- US$66 million equity investment via a non-brokered private placement of 81,865,425 common shares in Ithaca capital at CAD$1.05 per share (the placing price), equivalent to £0.53 per share
- Placing price represents a 19% premium to the closing price on the Toronto Stock Exchange (TSX) on Oct. 8 of CAD$0.88 per share – a 39% premium to the five-day volume weighted average price (VWAP) and a 51% premium to the 30-day VWAP
Ithaca says that investment proceeds will be used to strengthen the company’s balance sheet, reduce bank debt, and provide flexibility to pursue value-accretive satellite opportunities in the Greater Stella Area (GSA) of the UK North Sea.
Following completion of the placing, Delek will own approximately 20% of Ithaca’s issued and outstanding common shares, and will have the right to nominate two non-executive directors to Ithaca’s board of directors.
The transaction is expected to be completed on Oct. 16.