Kistos PLC (KIST.L) Acquisition of Tulip Oil for EUR222.75 million

Acquisition of Tulip Oil Netherlands B.V. (“TON “) for € 222.75 million

Equity Financing to raise up to £ 52.5 million at 155 pence per share

Admission of the Enlarged Share Capital to trading on AIM


Notice of General Meeting

Kistos (AIM: KIST) is pleased to provide further information in respect of its proposed acquisition of the entire issued and outstanding share capital of Tulip Oil Netherlands B.V. (“TON”) from Tulip Oil Holding B.V. (the “Vendor”) (the “Acquisition”), as announced by the Company on 12 March 2021.

The Acquisition constitutes a reverse takeover for the purposes of Rule 14 of the AIM Rules for Companies and, as such, is conditional, inter alia, upon Shareholder approval.

The Company also announces its intention to issue up to 42,613,743 New Ordinary Shares at a price per share of 155 pence. This figure comprises 8,742,775 Consideration Shares, which are being issued to Tulip Oil Holding B.V. (the “Vendor”) pursuant to the Acquisition, and between 27,096,774 and 33,870,968 New Ordinary Shares, which are being issued pursuant to the Equity Financing. The Equity Financing will raise gross proceeds of between £42.0 million and £52.5 million, which will be used to pay the cash consideration payable under the terms of the Acquisition (EUR 60 million) and for general working capital purposes.

The Placing is being conducted through an accelerated bookbuilding process (the “Bookbuild”) which will be launched immediately following this Announcement by Panmure Gordon (UK) Limited (“Panmure Gordon”), in its capacity as sole broker and bookrunner to the Company in connection with the Placing.

The result of the Equity Financing is expected to be announced later today.


· Kistos proposes the acquisition of the entire issued and outstanding share capital of TON, which, via its wholly-owned subsidiary, Tulip Oil Netherlands Offshore B.V. (“TONO”), owns an operating interest in the Q10-A offshore gas field and interests in other fields in the Dutch North Sea, including the Q10-B, Q11-B and M10/M11 discoveries, and other exploration and appraisal projects.

· The headline consideration payable by the Company to the Vendor to be satisfied at completion of the Acquisition amounts to EUR 222.75 million, comprising:

(i) the sum of EUR 60 million in cash;

(ii) the issuance to the Vendor of Consideration Shares representing a monetary value of EUR 15.75 million credited as fully paid;

(iii) the issue by TONO of EUR 60 million of Consideration Bond to the Vendor; and

(iv) the refinancing of the existing bonds issued by TONO (the “Existing TONO Bond”) by new bonds to be issued by TONO (the “New TONO Bond”), to the value of EUR 87 million in aggregate, with associated locked box and working capital adjustments.

· Contingent consideration of up to EUR 163 million (based on an exchange rate of $1.19:EUR 1) is also payable based on the achievement of certain development milestones. For the avoidance of doubt, no warrants will be issued by Kistos in connection with the Acquisition.

· ABG and Pareto have conditionally agreed to use their reasonable endeavours to place, as agent for the Company, the New TONO Bond which will be used to refinance the Existing TONO Bond. It is expected that the New TONO Bond will be placed, in full, prior to Admission.

· Following a review conducted by the Board, it has been resolved that, conditional on Admission, Andrew Austin, currently Non-Executive Chairman of the Company, will assume the role of Interim Chief Executive Officer and Richard Benmore, currently Independent Non-Executive Director of the Company, will assume the role of Interim Independent Non-Executive Chairman. The Company will appoint a Chief Financial Offer to its Board within 12 months of Admission.

· The Company expects to post the Admission Document to those Kistos Shareholders who have elected to receive hard copy documentation from the Company and publish an electronic copy of the Admission Document on its website, on 21 April 2021. The Admission Document includes a notice convening a General Meeting of the Company on at 11.00 a.m. on 14 May 2021.

· It is anticipated that admission of the Existing Ordinary Shares to trading on AIM will be cancelled and the Enlarged Share Capital will be admitted to trading on AIM shortly following the General Meeting. Admission and dealings in the Enlarged Share Capital are expected therefore to take place on 17 May 2021.

· Completion of the Acquisition and the issue of the New TONO Bond are expected to take place shortly following Admission.

Andrew Austin, Chairman of Kistos, commented:

“I am delighted to be announcing the acquisition, and the associated fundraising, this morning. This represents the culmination of many months of work and is, in my view, a hugely exciting development for stakeholders in Kistos. The portfolio of assets that we have acquired include profitable and cash generative producing assets, plus exploration and appraisal assets from which we are looking to deliver significant upside for our shareholders. Crucially, commercial production from the Q10-A field operated during 2020 with Scope 1 carbon emissions of just 9g CO2e/boe, compared to an industry average of 22kgCO2/boe for gas extractions from the UK continental shelf. We therefore see this acquisition as absolutely in line with Kistos’ strategy of managing assets with a role in Energy Transition.”

Directors’ participation in the Subscription

Certain Directors intend to subscribe for Subscription Shares pursuant to the Subscription. As at 19 April 2021 (being the latest practicable date prior to the notification of this Announcement) and, as expected to be immediately following Admission, the interests of each such Director in the issued share capital of the Company are as follows:

Related party transactions

The participation in the Subscription of certain Directors, as stated above, constitute related party transactions for the purposes of the AIM Rules. The Director who is independent of the related party transactions, being Julie Barlow, having consulted with Panmure Gordon (UK) Limited (“Panmure Gordon”), the Company’s nominated adviser for the purposes of the AIM Rules, considers the terms of participation of each of Andrew Austin, Richard Benmore and Alan Booth in the Subscription to be fair and reasonable insofar as Shareholders are concerned.

Exchange rate

Unless otherwise indicated, any numbers stated in pounds sterling which are derived from a Euro denominated number have been translated into pounds sterling at an effective exchange rate of £1:EUR 0.8604 (which is the spot pounds sterling to Euro exchange rate quoted on Bloomberg on 19 April 2021, the latest practicable date prior to the date of this Announcement).

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the “Important Notices” section below and the Appendices to this Announcement (which form part of this Announcement), which comprise the following:

Appendix I Further details on the Acquisition, Equity Financing and Debt Refinancing

Appendix II A description of the TON assets

Appendix III Risk factors

Appendix IV Unaudited pro forma statement of net assets of the Enlarged Group

Appendix V Historical financial information on TON and TONO

Appendix VI A competent person’s report on the TON assets

Appendix VII The terms and conditions of the Placing

Appendix VIII Definitions and glossary

Appendix IX Expected timetable of principal events

Market soundings (as defined in UK MAR) were taken in respect of the Placing and Subscription with the result that certain persons became aware of inside information (as defined in UK MAR), as permitted by UK MAR. This inside information is set out in this Announcement. Therefore , those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Persons who have chosen to participate in the Placing , by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making such offer on the terms and subject to the conditions herein and, in respect of those persons participating in the Placing, to be providing the representations, warranties, agreements, confirmations, acknowledgements and undertakings contained in Appendix VII .

For the purposes of UK MAR, the person responsible for arranging for the release of this Announcement on behalf of Kistos is Andrew Austin, Executive Chairman.

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