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Simba Energy increases size of placement to meet demand

Last updated: 11:07 05 May 2016 EDT, First published: 06:07 05 May 2016 EDT

Initially the placement was a cash infusion from Essel Group
The number of units being placed has been increased to 43mln units from 34mln

Simba Energy Inc (CVE:SMB) has increased the size of its previously announced private placement, and is now looking to raise up to C$2.15mln.

The company, subject to regulatory approval, plans to place up to 43 million units at a price of five cents per unit.

Each unit will comprise one common share and one-half warrant, where each full warrant is exercisable into a common share at a price of 7.5 cents per share for a period of two years.

Previously the company had said it would issue 34mln units to Dubai-based Essel Group Middle East DMCC to raise around C$1.7mln, but since then other parties have expressed an interest in subscribing for shares, including certain insiders and existing shareholders.

The proceeds from the private placement will be used to retire existing debt and for working capital purposes.

Essel Group Middle East has recently endeavoured to diversify further, with investments into the hydrocarbons resource sector, and has committed full support to advance Simba's African oil and gas portfolio through the exploration and appraisal phases in accordance to each governing public service commission by way of joint operating agreements on a per-asset basis, Simba said.

Shares in Simba were trading at six cents each, down half a cent, the morning after the expansion in the placing was announced.

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