Sound Energy Announces Successful Completion of Bond Restructuring

Source: 4/14/2021, Location: Europe

Sound Energy, the Moroccan focused upstream gas company , is delighted to announce that at the meeting of the holders of the Company's Luxembourg listed EUR 28.8m 5.0% senior secured notes due 2021 (the "Notes") held earlier today (the "Noteholder Meeting") to consider the Company's proposal for the restructuring of the Notes (the "Proposal"), the Proposal was duly approved by the requisite authority.

At the Noteholder Meeting, Quorum was reached with voting instructions representing EUR 22.4m of the Notes lodged by holders of the Notes ("Noteholders") with 96.88% of votes cast in favour of the Proposals.

As a result of the Noteholders' approval of the Proposal:

- The maturity date of the Notes will be extended by six years from 21 June 2021 to 21 December 2027;

- The outstanding principal amount of the Notes will be partially amortised, at a rate of 5% every six months, commencing on 21 December 2023;

- EUR 3 ,479,999 of the Notes will be converted, pro rata across Noteholders, into a total of 141,176,448 new ordinary shares in the Company (the "New Ordinary Shares"), issued at a conversion price of 2.125 pence per new ordinary share. 50% of the New Ordinary Shares to be subject to three month lock-in and 50% subject to a six month lock-in both with effect from date of admission;

- The Notes shall bear until maturity 2% cash interest paid per annum (the "Cash Interest") and 3% deferred interest per annum to be paid at redemption (the "Deferred Interest") for the period commencing on 21 June 2021 (in place of 5% cash interest per annum);

- In addition to the Company's existing redemption rights, the Company will have the right, at any time until 21 December 2024, to redeem the Notes in full for 70% of the principal value then outstanding together with any Cash Interest accrued and 100% of the Deferred Interest then accrued at the date of redemption; and

- The Company will issue to the Noteholders 99,999,936 warrants to subscribe for new ordinary shares in the Company at an exercise price of 2.75 pence per ordinary share (the "Warrants"). The Warrants will be exercisable from the date of issuance until 21 December 2027. The Warrants will be listed and admitted for trading on the Luxembourg Stock Exchange.

Details of the Proposal were set out in the Consent Solicitation Memorandum issued on 30 March 2021, which remains available on the Company's website at .

With the Proposal approved by Noteholders, the Company will issue the 141,176,448 New Ordinary Shares in the Company (representing c.10.64% of the Company's current issued ordinary share capital) to Noteholders on a pro rata basis, as detailed above.

Application has been made for the 141,176,448 New Ordinary Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will occur at 8.00 a.m. on 20 April 2021. Following Admission, the Company's issued ordinary share capital will comprise 1,467,420,837 Ordinary Shares, none of which are held in treasury.

Therefore, following Admission of the New Ordinary Shares, the total number of Ordinary Shares with voting rights in the Company will be 1,467,420,837 which may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

The Company is progressing the Final Investment Decision contract and approval processes for its Micro LNG phase 1 development with all relevant stakeholders. This will lead to a 'notice to proceed' and construction to start in due course. The Company confirms that, after restructuring of the Notes, it has sufficient cash resources through to August 2021 to undertake these activities.

Graham Lyon, Sound Energy's Executive Chairman, commented:

"I am pleased that Sound Energy has now successfully completed the restructuring of its loan note obligations. This new arrangement removes one of the constraints in progressing the development of the Tendrara TE-5 horst development. I would like to thank the Noteholders for working closely with Sound Energy to develop a solution that benefits all stakeholders. The Company is now well into the contracting and approval processes which will consequently deliver the phase 1 Micro LNG 'notice to proceed'."

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