Mast Energy secures £5 million through loan and warrants

LONDON - Mast Energy Developments PLC (LSE:MAST), a UK-based energy company, has announced a financial package consisting of a convertible loan note and an equity fundraise to secure up to £5.0 million. This move aims to bolster the company’s working capital and facilitate the growth of its asset base.

The first stage of the financing involves a £350,000 interest-free convertible loan note (CLN) provided by Big Sky Management Limited. This immediate funding is intended to cover transaction costs and maintain operations while the equity fundraise is finalized.

In the second stage, Mast Energy plans to raise £4.65 million through an equity fundraise via a warrant instrument, subject to shareholder approval and other conditions. The company has received conditional subscription letters from investors introduced by Fortified Securities, its corporate broker.

The equity fundraise is structured through prepaid warrants and cash warrants, both exercisable at £0.04 per share. The cash warrants are valid for six months from the date of grant and could bring additional proceeds to Mast Energy if exercised.

MED’s CEO, Pieter Krügel, expressed optimism about the company’s progress and the potential for rapid growth towards a strategic target of over 300 megawatts (MW) in production, citing recent successes and partnerships.

The CLN will convert into shares on the same terms as the equity fundraise, provided shareholder approval is obtained, and the equity fundraise is completed within 90 days. If not completed within this timeframe, the CLN becomes repayable in cash or convertible into shares at a 20% discount to the closing share price preceding the conversion.

The equity fundraise is contingent on several conditions, including shareholder approval for share consolidation and share authorities, the issue of a supplementary prospectus by the Financial Conduct Authority, and the execution of a relationship agreement with investors.

The proposed share consolidation involves combining every forty ordinary shares into one new ordinary share. The company will seek shareholder approval for this consolidation and necessary share headroom at the next general meeting.

The completion of these financial arrangements is expected to strengthen Mast Energy’s position to advance its current projects and expand its portfolio. Details of the general meeting and further terms will be disclosed in a supplementary prospectus.

This article is based on a press release statement from Mast Energy Developments PLC.

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