Prospex Energy PLC, the AIM-quoted investment company focused on European gas and power projects, announces that it has issued £565,000 in unsecured Convertible Loan Notes ('the Loan Notes') to existing and new investors ('the Subscribers'), including all of the directors of the Company.
The Company will now offer any existing shareholders and qualified investors the opportunity to participate in the Loan Notes on the same terms, for a total subscription (including the £565,000 received to date) of up to £1.6 million. The offer will remain open until 9 January 2026. Further details on how to subscribe to the Loan Notes can be found below.
Highlights
• £565,000 raised via the issue of unsecured Convertible Loan Notes of £1 each, due at the end of June 2028. Offer remains open until 9 January 2026 to raise up to £1.6 million.
• The Loan Notes are convertible at 3p per ordinary share at any time at the election of the investor.
• Interest at 12% per annum is payable quarterly, with the first two interest payments on 31 March 2026 and 30 June 2026 to be capitalised and added to the loan principal rather than paid in cash.
• Loan principal to be repaid in three tranches at the end of December 2027, the end of March 2028 and the end of June 2028. Forecast increased gas production from the drilling campaigns on all three of the Company's production concessions is expected to cover the capital repayments.
• Net proceeds will be used to support the Company's ongoing activities, including current and future capital expenditure requirements.
• Ongoing operational costs and overheads continue to be met from production income generated by the Company's strategic asset portfolio.
Mark Routh, Prospex's CEO, commented:
"The proceeds of the Loan Notes will mostly be used to fund the Company's 37% share of the 3D seismic acquisition on the Selva Malvezzi production concession in Italy. A minimum of £800,000 is required to cover the cash calls in respect of this asset received and to be received from the operator. £300,000 of the fund raise to is cover the commitment for a new transformer at the El Romeral power plant in southern Spain which is on order for delivery later in 2026. The balance of the £200,000 cash call from HEYCO Energy Group, Inc. to fund the Viura asset which was due in June 2025 is to be transferred into the Loan Notes.
"The Company believes it has a diverse and highly prospective investment portfolio with the potential to deliver significant value over time and, on this basis, encourages shareholders to consider participating in the offer of the Loan Notes."
Use of Funds and Structure
The funds raised from the issue of these Loan Notes is to fund the ongoing growth of the Company and its current and future capital expenditures. Ongoing operational expenditures and overheads are covered from production income from the Company's portfolio of assets.
The £565,000 Loan Notes issued to date comprises the following:-
• £300,000 in new cash from directors and existing shareholders,
• £200,000 of Loan Notes have been issued to HEYCO Energy Group, Inc. to fulfil the balance of the June cash-call on Viura, which the Company did not pay at the time, and
• £65,000 of Loan Notes issued to cover a cash advance to cover the deposit on ordering a new transformer at El Romeral.
The Company will accept further Loan Note subscriptions up to a total of £1.3 million (including the £565,000 committed to date) to cover:-
• £235,000 to fund the balance of the cost of the new El Romeral transformer in Q3-2026
The Company will accept further Loan Note subscriptions up to a maximum £1.6 million for general corporate purposes including contingency and costs.
Selva Malvezzi
£800,000 of the net proceeds of this fund raise is to provide funds towards the Company's share of development costs at the Selva Malvezzi concession, in the Po Valley in Italy, which includes cash calls under the Joint Operating agreement received and to be received from the operator to cover the Company's share of the costs of the 3D seismic acquisition programme which completed last month.
Viura
£200,000 of the issuance is to meet the balance of the June cash-call on Viura in northern Spain which was not fulfilled by the fund raise in June 2025. HEYCO Energy Group, Inc. has agreed that this £200,000 is to be converted into the Loan Notes.
Tarba - El Romeral
A total of £300,000 of the net proceeds is to meet the cost of a new transformer at the El Romeral power plant in Carmona southern Spain, which is due for delivery in 6-8 months, which is when the final payment of £235,000 will become due. The transformer was ordered in November and a 20% deposit of £65,000 has already been paid and converted into the Loan Notes.
Further Information on the Subscribers and the Loan Note
The Loan Notes will pay 12% interest per annum quarterly, with the first two quarterly interest payments on 31 March 2026 and 30 June 2026 to be capitalised and added to the loan principal rather than paid in cash. Quarterly cash interest payments will be made thereafter with the first payment on 30 September 2026. Unless converted, the Loan Note principal is to be repaid in three equal capital repayments scheduled at the end of December 2027, the end of March 2028 and the end of June 2028. Forecast increased gas production from the drilling campaigns on all three of the Company's production concessions is expected to cover the capital repayments.
The Company can elect to pay the interest in Euros by giving 10 business days' notice. The Company can elect, on a change of control of the Company, where a single party has over 50% of the issued share capital of the Company, to convert some or all of the issued Loan Notes, including capitalised interest, into ordinary shares at the lower of the 3p conversion price or the prevailing market price. Accrued but unpaid interest may be paid in cash at the time of conversion or added to the loan principal and converted at the election of the Noteholder.
Existing share authorities are sufficient to satisfy any potential conversion of the maximum approved amount of £1.6 million plus any accrued interest.
The Company can elect to repay the Loan Notes in full or part at any time by giving the noteholders one months' notice.
How to subscribe to the Loan Notes
The Loan Notes will be issued by the Company directly to each subscriber.
The Loan Note Investor Presentation and Term Sheet can be downloaded from the Company's website at https://prospex.energy/investors/corporate-documents.
To subscribe to the Loan Notes please contact the Company's brokers VSA Capital or Hannam & Partners by email:-
VSA Capital email mail@vsacapital.com
Hannam & Partners email info@hannam.partners
Loan Note Subscriptions to date
£565,000 Loan Notes have been issued to 8 individual subscribers, including all of the current Directors and one member of the executive management team who is also a Person Discharging Managerial Responsibility ("PDMR"):
Related Party Transaction
The participation in the Loan Notes by the Directors, and HEYCO Energy Group, Inc., constitutes a related party transaction under the AIM Rules. Due to the participation by all of the directors in the Loan Notes, there is not a director, or directors, independent of the issue of the Loan Notes to provide the necessary AIM Rule 13 related party transaction opinion. Accordingly, Strand Hanson Limited, the Company's Nominated Adviser, confirms it is satisfied that the terms of the participation by the Directors and HEYCO Energy Group, Inc., in the Loan Notes is fair and reasonable insofar as the Company's shareholders are concerned.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR.