Tethys Petroleum (TSE:TPL, LON:TPL) shares jumped over 13% in London as it secured US$15mln of interim financing from Olisol, paving the way for the Kazakh investor to provide a further C$25.5mln via a placing.
Olisol will advance to Tethys up to US$15million to be used to repay the US$5mln loan from Nostrum Oil & Gas and potentially the US$7.5 million convertible debenture from AGR Energy.
Olisol will convert the interim financing into Tethys shares at 17 cents a share - a premium to the current price of around 10 cents.
This interim financing is the first step in a potentially broader transaction, on which the pair are still negotiating, where Olisol will subscribe to a C$25.5mln private placing via 150 million new shares at 17 canadian cents each and commit to backstop a further equity fundraising of 50 million shares also at 17 cents each.
A condition to the first draw down is that Alexander Abramov, a designee of Olisol, and William Wells, of Pope Asset Management, a 19.1% shareholder of Tethys, be appointed to the board.
Tethys executive chairman John Bell said: "We are pleased to have reached agreement with Olisol on this crucial part of our broader transaction and to now have access to US$15 million in interim financing to see the company through to closing of the placing."