1 June 2017
Greka Drilling Limited (AIM: GDL), the largest independent and specialized unconventional oil & gas driller in Asia, announces that it has secured a US$2.5 million loan (the “Loan”).
The Loan is at an interest rate of 7.0% per annum and is repayable (principal and accrued interest) on 30 November 2018 or, at the option of the lender (the “Option”), between 1 January 2018 and 31 May 2018 through the transfer of the ownership held by the Company of the leases of the 28th and 29th floors of the office building in Zhengzhou, PRC where its Chinese operational headquarters are based. The net book value of these properties at 31 December 2016 was US$4.9 million and there are bank loans of approximately US$2.9 million secured on these properties. The Company has the option of repaying the Loan prior to the exercise of the Option, thereby redeeming the Option. The proceeds of the Loan will be used as to US$2.0m to pay creditors and US$0.5 million for working capital purposes.
The Loan has been provided by GRECAP Limited, which is controlled by Randeep S. Grewal, a director of the Company. Accordingly, the Loan represents a related party transaction under the AIM Rules for Companies. The Company’s directors (with the exception of Randeep S. Grewal who is involved in the transaction) consider, having consulted with the Company’s nominated adviser, that the terms of the Loan are fair and reasonable insofar as its shareholders are concerned.
For further information on Greka Drilling, please refer to the Company’s website at www.grekadrilling.com or contact:
+44 (0)20 7016 9829
Dr Azhic Basirov / David Jones / Ben Jeynes
Nominated Adviser and Broker
Smith & Williamson
+44 (0)20 7131 4000
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.