Tomco Energy Shares Dropped 5.8% on a £250K Convertible Loan

The TomCo Energy Plc (LON: TOM) share price dropped 5.76% after revealing that it had drawn down its first tranche of the £1,000,000 Convertible Loan facility agreed upon with Novum Securities Limited (“NSL”) on 30th March 2023.

The energy company drew down an initial amount of £250,000, which makes up its first tranche of funds drawn from the convertible note facility. In addition, the company agreed to issue, in aggregate, 41,666,667 Warrants in connection with the drawdown of Tranche One.

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Still, the company’s financial problems are far from over since it still has to secure US$16.25 million in cash to acquire the remaining 90% of the Tar Sands Holdings II LLC (TSHII) site, which has about 760 acres of land and a large mining permits in Utah, USA.

TomCo Energy got an extension for acquiring the land and the site, but the company has not yet unveiled a plan to raise the much-needed funds for its wholly-owned subsidiary Greenfield LLC. Hence, it is highly likely that the firm will have to forfeit its exclusive option to acquire the site. 

Therefore, today’s decline in TomCo Energy’s share price can be easily linked to the broader picture as investors finally realise that the company may have to relinquish its interest in the highly-lucrative Tar Sands Holdings II LLC site. 

Today’s drawdown will see the company issue the 41.67 million warrants mentioned above and a further 10 million warrants allowing the note holder to subscribe for a single ordinary share of TomCo Energy priced at 0.60p, representing an almost 100% premium to its current trading price. 

The convertible loan remains accessible to TomCo Energy and can be drawn down in three additional tranches following today’s drawdown. 

*This is not investment advice. 

TomCo Energy (TOM) share price. 

The TomCo Energy share price dropped 5.76% to trade at 0.311p, from Friday’s closing price of 0.330p.