SeaBird Exploration: Report of the Board of Directors concerning the EGM of 23 Oct 17
Report of the Board of Directors relating to the exclusion of Pre-emption rights
The approval being sought, if granted, will remain in force until 30 June 2020.
2.1 The Company has been in a difficult financial situation and has entered into arrangements for the restructuring of its debts and liabilities.
2.2 At an extraordinary general meeting held on 13 June 2017, the shareholders’ approved a restructuring of the Company’s debt and the conversion of part of the Company’s indebtedness into equity.
2.3 On 31 July 2017 the Board of Directors issued 54,389,711 additional shares in the Company to some of its creditors, as partial conversion of its indebtedness into equity.
2.4 At an extraordinary general meeting held on 17 August 2017, the shareholders resolved that the authorized share capital of the Company be increased from US$ 6,800,000.00 to US$ 16,800,000.00 divided into 168,000,000 shares of a nominal value of US$ 0.10 each, for the purpose of securing additional funds to cover the Company’s immediate financial needs through the issue of further equity.
2.5 At an Extraordinary General Meeting of the Company held on 2 October 2017, the authorised share capital of the Company, previously in the amount of US$16,800,000.00 divided into 168,000,000 ordinary shares of US$0.10 each, was divided into (a) 157,500,000 ordinary shares of a nominal value US$0.1 each, and (b) 1,050,000,000 Class A Shares, of a nominal value of US$0.001 each. The shareholders authorised the board of directors to issue and allot the Class A Shares and waived their pre-emption rights.
2.6 The company has carried out a private placement of 1,000,000,000 Class A Shares in the Company, each with a nominal value of USD 0,001, at a subscription price of NOK 0.10.
3. Purpose and justification for the proposal
3.1 The Board of Directors proposes and is considering the following two possible methods of raising funds through the issue of further equity:
(b) Offering of further shares to other investors.
3.2 The fundamental purpose for providing the Board of Directors with the authority to issue shares is to enable the Company, acting through its Board of Directors to utilize opportunities that arise in the marketplace, as they arise. This could take place in the form of mergers and acquisitions, refinancing, purchase of assets etc., in addition to incentivizing management and similar. An exclusion of the pre-emption rights of the existing shareholders would provide the Board of Directors with the required flexibility and the ability to use any of the above-mentioned methods of raising funds, in addition to the ability to act quickly when circumstances dictate that this is in the interests of the Company. It is therefore in the interest of all shareholders and other stakeholders, considering all options available to the company, to provide the directors the flexibility needed to act promptly and to be instantly responsive towards the opportunities that might arise.