LONDON: Oracle Power PLC has raised £500,000 to help fund its share of the pre-development project work at its electricity plant in Pakistan.
Along with Chinese energy giant Beijing Jingneng Power Company and its other joint venture partner, PowerChina, Oracle is developing a 700Mw coal-fired electricity plant in Pakistan’s Thar province.
At the end of January, the AIM company agreed to stump up £230,000 ($0.3 million) of the required £1.9 million ($2.5 million) pre-development funding.
Oracle raised the money by issuing 117.65 million new shares at a price of 0.425p apiece – equivalent to yesterday’s closing price.
For every share subscribed for, investors also received a warrant entitling them to buy another share within the next two years for 0.85p.
Should those warrants be exercised, that would bring in an extra £1mln for Oracle which it estimates would be enough for it to meet its commitments until it closes a US$1.6bn funding package.
The plan is to have that money in place by the end of the year.
“We are pleased to confirm this equity placing, which was conducted at market price, as it will strengthen the company's balance sheet and provide working capital as we move forward with our Chinese partners,” said chief executive Naheed Memon.
“The Block VI development in Thar is of material significance not only to Oracle but also to Pakistan in general, evidenced by its inclusion in the Priority List of the China Pakistan Economic Corridor".
“The initial phase of development carries a capital cost of US$1.6bn and is for a gross 4mln tonnes per annum mine, feeding a 700MW power plant.”
Brandon Hill Capital and its parent company Optima Worldwide Group (OWG) subscribed for another £88,000 worth of shares in the placing, taking OWG’s total interest up to 21.9%.
Oracle shares jumped 17.7% to 0.5p in late-afternoon trading on Thursday.