AIM-LISTED Green Dragon Gas yesterday announced that it has raised $100m (£65m) from an asset sale and bond issuance, as part of its strategic review to spur growth and pay off existing debt.
The China-focused gas developer sold a non-core wholesale gas distribution asset for $65m to investment firm Mandolin Capital, which already has an 18.2 per cent direct and indirect interest in Green Dragon’s share capital.
Green Dragon also issued $35m seven per cent notes to Mandolin. The secured, unsubordinated debt is due 3 December 2014. Additionally, it has issued 13,756,000 warrants to Mandolin at a price of 197.216p per share, which are exercisable until the bond’s maturity date.
The proceeds will be used to repay outstanding convertible bonds of $84.2m plus interest, as well as for capital spending and general working capital purposes.
“In this transaction, we achieved three key objectives; moving the company towards becoming a focused exploration and production growth business, paid off the maturing convertible bonds and accreted drilling capital,” said founder and chairman Randeep S Grewal.
Green Dragon’s shares closed up 1.02 per cent at 197.75p yesterday.
ADVISERS GREEN DRAGON
Smith & Williamson is acting as nominated adviser and broker to Green Dragon Gas on the £65m fundraising, led by Dr Azhic Basirov and David Jones. Basirov has previously worked on New Europe Property Investments’ rights issue and Japan Residential Investment Company’s asset sale.
Macquarie Capital and Peel Hunt have also been appointed brokers on the transaction. The Macquarie team is headed up by Steve Baldwin and Nicholas Harland. Harland joined the equity capital markets team in August 2010 and recently worked on San Leon Energy’s $100m placing, the privatisation of RAB Capital by management and the $84m placing by Sirius Minerals. Prior to joining Macquarie, Nick worked for Numis Securities and for Dresdner Kleinwort. He has been involved in numerous equity fundraisings and stock market flotations.
The Peel Hunt team was led by Richard Crichton and Andy Crossley, who recently advised Tangiers Petroleum on a farm-out agreement in Australia. Pelham Bell Pottinger is advising the company on public and investor relations, led by James Henderson and Phillip Dennis.