Africa Oil Corp has announced that it has entered into an equity subscription agreement with International Finance Corporation, a member of the World Bank Group, to sell, on a non-brokered private placement basis, 31,169,048 of its common shares at a price of CAD $2.10 for gross proceeds of CAD $65,455,000 (US $50 million(1)).
This means that upon completion of the private placement the world’s largest global development institution will hold approximately 6.83% of the issued and outstanding common shares of the Company.
According to Africa Oil President and CEO Keith Hill the proceeds of the private placement will be used to fund the Company’s oil and gas exploration, appraisal and development activities, and general working capital requirements, primarily aimed at advancing the appraisal and development of the South Lokichar Basin in Blocks 10BB and 13T.
“This investment will underscore our commitment to conducting our operations to high social and environmental standards. The investment allows us to continue moving the Lokichar project forward in the difficult times of low oil prices and we hope that IFC will become a long term partner as we move the project into development,” says Hill.
Africa Oil adds that it hopes to expanding this relationship as development accelerates in light of the recently announced export pipeline agreed by the Kenya and Uganda host governments.
“The sustainable development of the South Lokichar project holds significant potential for Kenya’s continued economic growth. Through this investment, IFC looks forward to an active engagement with Africa Oil that will help pioneer Kenya’s entry into the cadre of oil producing nations in sub-Saharan Africa,” ,” said Lance Crist, IFC Global Head of Natural Resources.
An application will be made to the Toronto Stock Exchange (the “TSX”) for approval of the private placement with the Company expecting the closing to occur on or around August 31, 2015.