|By Marketwired .||
|September 27, 2013 06:20 PM EDT||
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 09/27/13 -- LNG Energy Ltd.'s (TSX VENTURE:LNG) ("LNG" or the "Company") announces a proposed consolidation and subsequent share split of its common shares in order to eliminate the number of odd-lot shareholdings that have evolved over the years and reorganize its capital structure to facilitate future business transactions.
Reasons for Restructuring
LNG currently has outstanding 577,353,410 Common Shares. Based on recent data, approximately 1,052,015 or 0.002% of the Common Shares are held by an estimated 6,397 shareholder accounts with current holdings of fewer than 1,000 shares, representing an average of approximately 164 Common Shares per holder.
Shareholders with small or odd-lot holdings have had no cost effective option to dispose of their shares. The consolidation proposal provides a cost effective liquidity option for small shareholders to sell their holdings and liquidate their investment on favourable terms, relative to current and recent market trading prices without payment of brokerage fees that in many cases would be more than their sale proceeds.
As a reporting issuer, LNG is required to disseminate to registered and beneficial shareholders interim statements, annual statements and associated continuous disclosure materials. In the case of many small shareholders, the administrative cost associated with providing such services represents a disproportionately large percentage of the total share value of their investment. LNG spends a significant amount of money each year printing and mailing materials required by statute, such as annual reports and information circulars, to these small shareholders and serving their accounts through LNG's registrar and transfer agent. The effect of the proposed consolidation will be to reduce administrative costs associated with maintaining a large shareholder base of odd-lot and small shareholders, by significantly reducing the number of these shareholders.
LNG expects that it will be necessary to issue additional Common Shares in order to raise further capital and/or make investments in additional businesses it is currently seeking to identify. Any share issuances are subject to the regulatory requirements of the TSX Venture Exchange (the "Exchange"), including minimum pricing which is generally $0.05 per share. Based on recent trading prices of the Common Shares it would be difficult to raise additional capital at such minimum pricing levels. The proposed share consolidation and stock split will result in holders of 1,000 or more Common Shares effectively being consolidated on a 20 to 1 basis. This will provide increased flexibility for LNG to structure future issuances of shares.
Mechanics of Restructuring
The basis of consolidation proposed Common Shares will be one (1) post-consolidated Common Share for each one-thousand (1,000) pre-consolidated Common Shares (the "Consolidation"). Holders of fewer than 1,000 Common Shares who do not elect to increase their holdings to 1,000 or more Common Shares prior to the effective date of the share consolidation will receive cash of $0.01 per share and their Common Shares would be cancelled. Any holder of less than one (1) post-consolidated Common Share will cease to hold Common Shares and will be entitled to be paid cash consideration equal to that number of pre-consolidation Common Shares held by the holder multiplied by an amount equal to the average weighted trading price of the Common Shares for the ten trading days preceding the Consolidation Effective Date, the announcement date of the Share Alteration, rounded to the nearest whole cent. Immediately following the Consolidation, the remaining Equity Shares will be split on the basis of fifty (50) post-split shares for each one (1) post-consolidated share to achieve minimum distribution and other requirements of the Exchange. Fractions will be rounded to the nearest whole number on the split.
Shareholder and Regulatory Approvals
In order to implement the Share Consolidation Plan, special business will be proposed at the upcoming extraordinary general meeting of shareholders to approve an alteration of the Common Shares to effect a consolidation of the Common Shares, on the basis proposed, with an immediate stock split of such shares thereafter to meet the minimum distribution requirements of the Exchange. Approval of two thirds of Common Share shareholders present or represented by proxy would be required for approval of the Share Consolidation Plan. If approved, the consolidation and the share split would be expected to occur immediately thereafter.
Shares purchased by LNG in conjunction with the share consolidation will be cancelled. Purchase transactions for such cancelled shares and all associated costs will be funded by LNG. Formal notification, including confirmation of the record date for the Share Consolidation, confirmation of any required regulatory or shareholder approvals, letters of transmittal and related documentation for implementing the Share Consolidation, will be provided by LNG as and when received. It is estimated that $100,700 inclusive of meeting, advisory and transaction costs, will need to be allocated to the implementation of the Share Consolidation Plan.
The shareholder meeting is scheduled for November 6, 2013. Shareholders will be provided with information by mail in coming weeks outlining in detail the proposed terms of consolidation/stock split, the basis of consolidation, and any necessary steps they need to take.
The Share Consolidation Plan is subject to the approval of the Exchange and shareholders. No assurance can be given that the Shareholder Consolidation Plan will be approved by the Exchange or by shareholders on the terms proposed or at all.
LNG is a Canadian exploration and development company focused on developing oil and gas properties in Papua New Guinea, Poland and Bulgaria. LNG holds in Papua New Guinea a 16.85% net interest in PPL 319 and a 84.25% interest in 3 additional PPLs in northern Papua New Guinea (which collectively cover approximately 5.5 million gross acres) and a 20% net interest in PRL 13 (which covers approximately 42,000 gross acres). LNG has entered into a farm-in agreement with subsidiaries of Heritage Oil PLC under which those subsidiaries acquired an 80% interest in PPL 319 and PRL 13, subject to fulfillment of work commitments under the farm-in agreement. LNG has a 20.18% net interest in approximately 734,000 gross acres of prospective shales in Poland together with BNK Petroleum Inc., Sorgenia E&P S.p.A., and Rohol-Aufsuchungs Aktiengesellschaft. LNG is operator and has a 50% net interest in approximately 360,000 gross acres of prospective shales in Poland together with San Leon Energy. LNG has entered into a farm-in agreement relating to 405,080 acres of prospective argillite formation in Bulgaria with Direct Petroleum Bulgaria EOOD, a subsidiary of TransAtlantic Petroleum Ltd. LNG also holds a 100% working interest (80% net revenue interest) in approximately 13,000 net mineral acres of oil and gas leases in Daniels and Sheridan Counties located in north east Montana as well as a 100% working interest (79% net revenue interest) in approximately 46,700 net acres of oil and gas leases in Cascade County, in western Montana. LNG shares trade on the TSX Venture Exchange under the symbol "LNG".
LNG ENERGY LTD.
David Nelson, President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including information regarding the share reorganization. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management. Forward looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risks related to unsatisfactory results of due diligence, international operations and doing business in foreign jurisdictions, risks associated with the oil and gas industry and exploratory and development activities generally (e.g., operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, risks associated with equipment procurement and equipment failure), the risk of commodity price and foreign exchange rate fluctuations, risks related to future royalty rate changes, and risks and uncertainties associated with securing and maintaining necessary regulatory approvals, and counterparty risk related to the stability and viability of the Company's joint venture participants.
Shares Outstanding: 577,353,410
LNG Energy Ltd.