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FOR IMMEDIATE RELEASE 12 February 2013
("TXO" or the "Company")
TXO SHAREHOLDING IN THE GRAND BAHAMA GROUP LIMITED NOW 30.17%
Construction of Hydrocarbon Recovery Plant commenced
The Board of TXO Plc ("TXO") is pleased to announce that it has completed a further investment in Grand Bahama Group Limited ("GBG"). The Company has purchased a further 100 ordinary shares for a consideration of £700,000 being settled through £350,000 in cash and £350,000 though the issue of 116,666,667 Ordinary Shares in TXO at an issue price of 0.30p per Ordinary Share. The additional investment represents a further 6.53% shareholding in GBG and takes TXO's equity holding in GBG to 30.17%.
The investment by TXO in GBG will be directed to its wholly owned subsidiary, Morgan Oil Marine, for the construction of a Hydrocarbon Recovery Plant ("HRP") in Freeport. For the period from 1 January to 12 September 2012 GBG recorded a loss of $433,850 on turnover of $291,643 and had net assets of $337,662 at the period end.
TXO's investment in GBG will continue to be accounted for using the equity method. Initial recognition is at cost, but thereafter at each reporting period the investment value is adjusted to recognise TXO's share of the profit or loss and assets for that period, and tested for impairment if necessary.
The Company has agreed a new option to acquire a further 268 ordinary shares in GBG at the same valid price to the end of December 2013. If the option is exercised, it would increase TXO's total holding in GBG to 43.18%.
The 116,666,667 Ordinary Shares have been issued and allotted to GBG which represents 11.04% of TXO's enlarged share capital. GBG's holding in TXO now totals 130,000,000 Ordinary Shares, representing 12.40% of TXO's current issued share capital. Application has been made for the new shares to be admitted to trading on AIM on 18 February 2013.
David Morgan, Chairman of Grand Bahama Group Limited commented:
"We are grateful to TXO for this additional investment. Additionally, we are delighted to announce that Morgan Oil Marine has now commenced construction of its new Hydrocarbon Recovery Plant, scheduled to complete second quarter of 2013. In the interim, the 1m-gallon capacity Barge Martha and the 20,000-gallon capacity Tug Victoria have commenced the limited collection of ships slops and used lubricant whilst the crews are undergoing sea trials. This will generate positive cash flow that may help reduce any requirement for further equity investment. However, we have agreed to extend the Option to allow the maximum flexibility in this regard. "
Tim Baldwin, Chief Executive and Chairman of TXO Plc commented:
"We are pleased to be able to announce that we have increased our equity stake in GBG to 30.17% and extended an option that will allow us to increase our stake to 43.18% in the future. GBG is a low risk, cash generative business that helps to balance the TXO portfolio."
For further information, please contact:
Tim Baldwin, Chairman +44 (0) 207 518 4300
Fox-Davies Capital Limited +44 (0) 203 463 5000
Simon Leathers (Nominated Adviser)
Daniel Fox-Davies / Richard Hail
Lothbury Financial Services Limited
Michael Padley / Chris Roberts +44 (0) 203 440 7620
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