Africa Oil Corp. (“Africa Oil” or the “Company”) is pleased to announce that it has entered into an equity subscription agreement with International Finance Corporation (“IFC”), a member of the World Bank Group, to sell, on a non-brokered private placement basis, 31,169,048 of its common shares at a price of CAD $2.10 for gross proceeds of CAD $65,455,000 (US $50 million1 ). Upon completion of the private placement IFC will hold approximately 6.83% of the issued and outstanding common shares of the Company.
IFC is the world’s largest global development institution focused exclusively on the private sector in developing countries.
Proceeds of the private placement will be used to fund the Company’s oil and gas exploration, appraisal and development activities, and general working capital requirements, primarily aimed at advancing the appraisal and development of the South Lokichar Basin in Blocks 10BB and 13T. An application will be made to the Toronto Stock Exchange (the "TSX") for approval of the private placement. The closing of the financing is subject to regulatory approval and certain other customary conditions.
The Company expects the closing to occur on or around August 31, 2015. The new shares will be admitted to trading on Nasdaq Stockholm after they have been issued by the Company.
Keith Hill, President and CEO of Africa Oil, commented, “We are very pleased that we were able to attract an investment partner of the caliber of IFC and consider it an important endorsement of our project. This investment will underscore our commitment to conducting our operations to high social and environmental standards. The investment allows us to continue moving the Lokichar project forward in the difficult times of low oil prices and we hope that IFC will become a long term partner as we move the project into development. We also look forward to expanding this relationship as development accelerates in light of the recently announced export pipeline agreed by the Kenya and Uganda host governments.”
“The sustainable development of the South Lokichar project holds significant potential for Kenya’s continued economic growth,” said Lance Crist, IFC Global Head of Natural Resources. “Through this investment, IFC looks forward to an active engagement with Africa Oil that will help pioneer Kenya’s entry into the cadre of oil producing nations in sub-Saharan Africa.”
The common shares issued in the financing will be subject to resale restrictions under Canadian securities laws for a period of four months plus one day from the date of the closing of the financing. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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