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BOTSWANA: Tlou Energy Announces Proposed Placing to Raise £2.6 million

Tlou Energy has announced its intention to undertake an equity placement of £2.6 million.  The Placing will be conducted through an accelerated bookbuild process with a price of 3.5 pence. 

The Placing Shares are not being made available to the public. It is envisaged that the Bookbuild will be closed no later than 16 March 2021. Details of the number of Placing Shares and the approximate gross proceeds of the Placing will be announced as soon as practicable after the closing of the Bookbuild. The Placing is not underwritten and Shore Capital is acting as sole bookrunner in connection with the Placing.

Use of Funds 

The net proceeds of the Placing, along with existing cash, will mainly be applied by Tlou towards: 

·      Construction of a 66kV transmission line from the Company’s Lesedi project to the existing electricity grid at Serowe, Botswana; and

·      Field operating costs and ancillary equipment 

The Company plans to commence work as soon as possible on the transmission line following award of tenders for the construction of overhead transmission lines and sub-stations. The Environmental and Social Impact Assessment for the line has been completed as well as route alignment and associated surveys. 

Funds will also be used to cover working capital requirements including general and administrative costs across the Company’s three stock exchange listings on ASX, AIM and BSE. The timing and execution of activities proposed to make use of the funds raised may be impacted by Covid-19 pandemic restrictions. 

The above is a statement of the Board’s current intentions as at the date of this announcement. However, Shareholders should note that, as with any budget, the allocation of funds set out above may change depending on a number of factors, including the outcome of operational and development activities, regulatory developments, market and general economic conditions and environmental factors. In light of this, the Board reserves the right to alter the way the funds are applied.

Project Finance 

Tlou Energy has been working with a number of parties to secure funding for the Lesedi project. The most advanced project finance discussions are currently with a very reputable Botswana based entity, who are proceeding to get a third-party review of the project as part of their due diligence process. Once this report is assessed an investment decision can be made by this entity.

 The Lesedi project is proposed to be developed in two phases. Phase one involves transmission line construction, sub-stations, grid connection, electricity generators and potentially the drilling of additional gas wells. The ~100 Km transmission line will run from the Lesedi project to the town of Serowe where it can access the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is ~USD $10m which can be staged if necessary or prudent to do so.

 Phase two funding is for the expansion of electricity generation up to 10MW. This is planned to include  drilling of gas wells and the purchase of additional generation assets. Funding required for phase two is ~USD $20m. Upon successful completion of phase one and two, the Company plans to expand the project beyond 10MW.

Details of the Placing 

The Placing is being completed within the Company’s existing share issuance authorities. Shore Capital Stockbrokers Limited  will be conducting an accelerated bookbuilding process in respect of the Placing. The book will open with immediate effect. Shore Capital has entered into an agreement with Tlou under which, subject to the conditions set out therein, Shore Capital will agree to use its respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is subject to the terms and conditions set out in the Appendix to this announcement. Members of the public are not entitled to participate in the Placing. 

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with Tlou’s existing issued common shares of no par value each . Details of the final number of Placing Shares and the Placing Price will be announced as soon as practicable after the closing of the Bookbuild. 

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