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LONDON (Alliance News) - Frontier Resources International PLC on Thursday said it is at an "advanced stage" of preparations to raise about GBP1.4 million by selling new shares, with a new chairman to be appointed if the fundraising goes through.
The equity is to be issued to new and existing investors at 0.03 pence per share. Shares in Frontier were down 29% at 0.05p on Thursday afternoon.
Should the fundraising go through, Adam Reynolds will become the company's new chairman. Frontier pointed to his experience as a non-executive director at AIM-listed companies such as EKF Diagnostics Holdings PLC, Premaitha Health PLC and Optibiotix Health PLC.
Reynolds also serves as the chairman of New World Oil & Gas PLC, among other appointments. He is set to replace Neil Herbert at Frontier.
"Mr Reynolds has a track record of implementing change strategies for companies and the board believe that his appointment will enable the company to develop in a new strategic direction to re-build shareholder value," Frontier said.
The company reiterated its "urgent need" for funding to support its immediate working capital requirements "over and above the potential commitments" for its oil exploration projects.
Frontier acknowledged that the subscription will dilute existing shareholders, but said the "costs and requirements" of an open offer or rights issue would make such an alternative implausible.
To help make up for the dilution, Frontier said it plans on issuing new warrants to existing shareholders exercisable at the 0.03p subscription price.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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