Africa Energy Announces Update To Non-Brokered Private Placement

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CNW Group

Thu, Jan 30, 2025, 3:00 PM 5 min read

VANCOUVER, BC, Jan. 30, 2025 /CNW/ - Africa Energy Corp. (TSX Venture: AFE) (Nasdaq First North: AEC) ("Africa Energy" or the "Company") announces an update to the non-brokered private placement of common shares of the Company (the "Shares"), previously announced on December 23, 2024. Following discussions with the TSX Venture Exchange (the "TSXV"), the transaction will now consist of a shares for debt transaction whereby the Company will settle approximately US$5,425,000 (C$7,796,940) of existing indebtedness through the issuance of 389,847,000 Shares to existing debtholders (the "Shares for Debt Transaction"), and a non-brokered private placement of Shares for aggregate gross proceeds of approximately US$8,325,000 (C$11,963,060) (the "Private Placement"). The Company today also announces a proposed consolidation of the Shares on a 5:1 basis (the "Consolidation"), which is expected to be completed within 90 days of closing of the Shares for Debt Transaction and the Private Placement. View PDF Version

Shares for Debt Transaction

As of March 31, 2025, Deepkloof Limited ("Deepkloof") will hold approximately US$4,500,000 and Lorito Doraline S.à.r.l., Lorito Floreal S.à.r.l., Lorito Arole S.à.r.l. and Lorito Orizons S.à.r.l. (the "Lorito Group") will, in the aggregate, hold approximately US$1,740,000 of existing indebtedness of the Company. The Company intends to enter into debt settlement agreements with Deepkloof and the Lorito Group, pursuant to which Deepkloof will receive 323,345,000 Shares to settle approximately US$4,500,000 (C$6,466,900) of existing indebtedness of the Company and the Lorito Group will receive, in the aggregate, 66,502,000 Shares to settle approximately US$925,000 (C$1,330,040) of existing indebtedness of the Company. The Shares for Debt Transaction is subject to the approval of the TSXV in accordance with Policy 4.3 – Shares for Debt of the TSXV Corporate Finance Manual. In total, the Company intends to issue 389,847,000 Shares at a deemed issue price of C$0.02 (C$0.10 on a post-Consolidation basis) per Share to settle approximately US$5,425,000 (C$7,796,940) of existing indebtedness pursuant to the Shares for Debt Transaction.

Private Placement

The Private Placement will consist of the sale of up to 598,153,000 Shares at an issue price of C$0.02 (C$0.10 on a post-Consolidation basis) for aggregate gross proceeds of up to approximately US$8,325,000 (C$11,963,060). As previously announced, Deepkloof, a lender under the Company's existing debt, has agreed to support the Private Placement and is expected to subscribe under the Private Placement for 560,915,000 Shares at an issue price of C$0.02 (C$0.10 on a post-Consolidation basis). The proceeds from the Private Placement will be used to repay existing debt held by Africa Oil Corp. ("Africa Oil") (approximately US$4,500,000), repay the remaining debt held by the Lorito Group following the Shares for Debt Transaction (approximately US$815,000), for general working capital purposes and to advance the development of the Company's interest in Block 11B/12B offshore South Africa.

The Shares received by Deepkloof pursuant to the Shares for Debt Transaction and the Private Placement will result in Deepkloof becoming a "control person" of the Company. Accordingly, pursuant to the policies of the TSXV, the Company is required to obtain disinterested shareholder approval for the Shares for Debt Transaction and the Private Placement (the "Required Shareholder Approval"). As previously announced, Africa Energy has entered into a customary voting support agreement with Africa Oil, representing approximately 19.68% of the Company's issued and outstanding Shares, where Africa Oil has agreed to vote in favour of the Required Shareholder Approval. The Company intends to obtain the Required Shareholder Approval at a special meeting of the Company's shareholders, a date for which has not been set as of the date hereof.

Completion of the Shares for Debt Transaction and the Private Placement is subject to certain conditions including, but not limited to, the receipt of the Required Shareholder Approval and the receipt of all necessary regulatory approvals, including the approval of the TSXV. Completion of the Shares for Debt Transaction and the Private Placement is expected to occur prior to March 31, 2025.

Consolidation

The Consolidation is being undertaken to better align the issue price of the Shares in the Shares for Debt Transaction and the Private Placement with the policies of the TSXV governing the minimum permissible issue price per share issued in a financing. Completion of the Consolidation remains subject to TSXV acceptance and shareholder approval. While a date for a shareholder meeting to approve the Consolidation has not been set as of the date hereof, Africa Energy expects to have voting support for the Consolidation prior to completion of the Shares for Debt Transaction and the Private Placement from Deepkloof, Africa Oil, Impact and the Lorito Group which, after giving effect to the Shares for Debt Transaction and the Private Placement, represents approximately 76% of the issued and outstanding Shares. Subject to TSXV and shareholder approval, the Company has committed to completing the Consolidation within 90 days of closing of the Shares for Debt Transaction and the Private Placement. There are currently 1,407,812,249 Shares issued and outstanding (2,395,812,249 following closing of the Shares for Debt Transaction and the Private Placement). After giving effect to the Consolidation, and after giving effect to the issuance of Shares pursuant to the Shares for Debt Transaction and the Private Placement, there is expected be an aggregate of approximately 479,162,450 Shares issued and outstanding.

About Africa Energy Corp.

Africa Energy Corp. is a Canadian oil and gas exploration company focused on South Africa. The Company is listed in Toronto on the TSX Venture Exchange (ticker "AFE") and in Stockholm on the Nasdaq First North Growth Market (ticker "AEC").

Important information

This is information that Africa Energy is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on January 30, 2025, at 5:00 p.m. ET.

The Company's certified advisor on Nasdaq First North Growth Market is Bergs Securities AB, +46 739 49 62 50, rutger.ahlerup@bergssecurities.se.

This press release is not for distribution to United States news services or for dissemination in the United States, and does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein in the United States. These securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any State securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.

Forward Looking Statements

This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws, including, but not limited to, the terms and timing for completion of the Shares for Debt Transaction and the Private Placement, the Company's anticipated use of proceeds from the Private Placement, timing for the proposed Consolidation, receipt of all required approvals, including TSXV approval in respect of the Shares for Debt Transaction, the Private Placement and Consolidation, and the number of Shares expected to be outstanding post-Consolidation. All information, other than information regarding historical fact, that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. The use of any of the words "will", "expected", "planned", "intends", "may" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information. The forward-looking information contained in this press release is based on a number of assumptions made by management of the Company. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect.

The forward- looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.