EastCoast Energy announces oversubscription of rights issue
EastCoast Energy Corporation has made an announcement that its rights issue was oversubscribed, and gross proceeds of Cdn$21.5 million have been raised for the Company. The Company domiciled in the British Virgin Islands has reported its intention to raise Cdn$21.5 million through a rights issue in November, and the rights issue was closed on November 29, 2006.
Under the terms of the rights issue, each holder of Class B share was entitled to receive one right for one Class B share, at a price of Cdn$ 6.43. Each holder of a Class A share was entitled to receive one right for each Class A Share held and seven rights entitled the holder to subscribe for one Class B Share at a price of Cdn$ 6.43.
Each holder of rights who exercised all of their rights was entitled to subscribe for additional Class B Shares that had not been subscribed and paid for at 12:00 noon on 29 December 2006 (”Additional Subscription Privilege”). The subscription price of Cdn$ 6.43 was a 15% discount to the closing price of the Class B Shares on 7 September 2006.
The Company will issue 3,345,540 Class B Shares, including 27,070 under the Additional Subscription Privilege. This will increase the number of Class B Shares in issue to 25,053,128. The number of outstanding Class A Shares remains the same at 1,751,195.
EastCoast Energy will use these funds mainly for developing its gas assets in Tanzania, and to pursue new options for growth. In the first half of 2007, the Company will drill a development well, for the future gas sales to the power sector.