Shares in Victoria Oil & Gas have dropped more than 10 per cent after the company confirmed reports it plans to raise funds.
The Cameroon-focused natural gas producing utility said it had been in advanced discussions with a number of investors regarding a possible placing to fund the company's a new growth programme.
Victoria plans to raise between $20m (£15m) and $26m through an accelerated bookbuild with new ordinary shares to be issued at a minimum price of 57p. The company also proposed raising up to $3m by way of an open offer which will be available to all qualifying shareholders.
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Victoria said its directors intend to participate in the fundraise.
The proceeds, along with funds secured from banks in Cameroon, will be used to accelerate plans to grow gas production in Douala, which is located in the southwest of the country. Victoria aims to meet the needs of the Cameroon power sector, and it said Douala has around a 1.7 gigawatt power deficiency.
Shore Capital and FirstEnergy Capital have been appointed as joint bookrunners.
Shares in the Aim-listed company dropped 10.04 per cent to 58.25p in morning trading.