Regency mines Plc (LON:RGM) have seen their shares plummet on Friday after the firm reflected on what was a tough year.
Regency Mines plc is a small cap natural resource exploration and development listed company on the Alternative Investment Market of the London Stock Exchange Ltd in London.
The firm reflected back on what seemed to be a modest year for the firm, as it reported a widened loss in its recently ended financial year.
The company reviewed the financial year by saying it was “difficult and disappointing”.
The firm yesterday said that it will be buying out the remaining shareholders in its UK energy storage business, Allied Energy Services business.
These shareholders hold a 20% stake in Allied Energy, where as Regency Mines hold an 80% stake.
For the sale of the remaining 20%, the minority shareholders will be issued 2.5 million shares in the company, following the 1 for 100 share consolidation, which is expected to take place on Tuesday next week.
For the financial year, Regency reported a pretax loss of £2.6 million which was widened from £1.5 million the year before, a stat that will worry shareholders.
The firm said that this was mainly due to a one-off gain of £1.5 million from a disposal in the 2018 financial year, more than offsetting higher impairment charges.
Additionally, the loss was widened due to a written of investment in joint venture firm Mining Equity Trust LLC which was unable to continue coal production in the US due to a shortage of funds.
There was also the write-off of the company’s investment in White Car Ltd, which entered voluntary liquidation in June, and funding constraints limiting progress in the Dempster vanadium project in the Yukon, Canada.
Regency speculated that it expects to end 2019 with firmer foundations, following proposed fundraising, debt restructuring, share consolidation and change in board.
All these strategies however will be approved at their general meeting next week.
Shares of Regency Mines plummeted 14.13% on the announcement to 0.032p. 20/12/19 11:12BST.
Regency’s Share Placing Plan
The firm announced at the start of December that it would be conducting a share placing plan as part of a company restructuring program.
Regency has proposed to raise £831,000 via a placing of 3.02 billion new shares at a price of 0.0275p each. Alongside the placing, an additional 530.0 million shares, representing obligations of £145,785, have been issued to Red Rock Resources PLC (LON:RRR) in “full extinguishment of outstanding obligations”.
The share placing plan meant that the company will have 8.69 billion shares in current issue.
Regency also said that C4 Energy Ltd, a UK incorporated private company, part controlled by proposed new chair James Parsons, has secured an option to acquire Regency’s remaining debt.
Regency concluded that partial conversion of f promissory notes will result in the issue of 2.60 billion shares, while holders of £281,113 in outstanding convertible loan notes have agreed to convert these into 1.02 billion shares.
Certainly, this has been a tough time for Regency Mines, and shareholders will hope that 2020 can bring some good results following pledges to overhaul operations and management.
