Falkland Islands Holdings has agreed to subscribe for 2 million new shares placed by Falkland Oil and Gas Limited. FIH says the £860,000 cost of the shares will be met from the group's existing cash resources.
Following the purchase the group through its Falklands based subsidiary Erebus will own 14 million shares in FOGL, equivalent to 4.4% of its enlarged share capital.
FIH shareholding in FOGL is subject to an agreement that restricts FIH from selling FOGL shares prior to 31 May 2012 without the consent of FOGL broker.
FIH chairman David Hudd said: We are pleased to support FOGL exploration activity in the south and east Falkland Basins by subscribing to FOGL fundraising and to have increased our shareholding at an attractive price prior to the commencement of the drilling program.
It has always been part of FIH strategy to assist, and to seek to benefit from, oil exploration and development in the Falkland Islands through our support services businesses there, as well as through our substantial shareholding in FOGL. With the Leiv Eiriksson oil rig arriving in the Falklands later this month, we believe that this is an opportune time to increase our exposure to FOGL drilling program without compromising the financial strength of the Group”.
Shareholders in FIH now have an effective interest in 1.5 FOGL shares for every FIH share they own.”
FIH is an international group which owns essential services businesses focused on transport and logistics and which has a substantial shareholding in FOGL.