REG - Bowleven plc - Cancellation, Exit Opportunity & Notice of GM

BowlevenAnnouncement

09/08/2024 07:00

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RNS Number : 8165Z  Bowleven plc  09 August 2024

 

9 August 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 WHICH FORMS PART OF DOMESTIC UK
LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN
POSSESSION OF INSIDE INFORMATION.

 

 

Bowleven plc

(''Bowleven'' or the "Company")

 

Proposed Cancellation of Admission of the Ordinary Shares to Trading on AIM

Exit Opportunity for Minority Shareholders

and

Notice of General Meeting

 

Bowleven, the Africa focused oil and gas exploration and production company
with key interests in Cameroon, today announces, subject to Shareholder
approval, the proposed cancellation of the admission of its ordinary shares of
0.1 pence each ("Ordinary Shares") from trading on AIM (the "Cancellation"),
the re-registration of the Company as a private limited company (the
"Re-registration") following the Cancellation and the adoption of new articles
of association (the "New Articles") to be effective on the Re-registration
(the Cancellation, Re-registration and the adoption of the New Articles
collectively being the "Proposals").

 

In connection with the Proposals, the Company announces that it will post a
circular to Shareholders (the "Circular") later today which will contain
further information on the Proposals and notice of a general meeting to be
held on 28 August 2024 at 11:00 a.m. at The Office Group, Borough Yards, 13
Dirty Lane, London, SE1 9PA (the "General Meeting") at which Shareholder
approval will be sought for the Proposals.

 

Exit Opportunity for Minority Shareholders

 

In connection with the Cancellation, Crown Ocean Capital, which has an
interest in the Company's Ordinary Shares representing 58.33 per cent. of the
Company's existing issued ordinary share capital (excluding shares held in
treasury), will provide Minority Shareholders with a liquidity option, should
they not wish to continue to hold their Ordinary Shares following the
Cancellation (the "Exit Opportunity").

 

The key terms of the Exit Opportunity are:

 

·    a purchase price of 0.225 pence per Ordinary Share in respect of
Ordinary Shares listed on AIM which was determined as the closing price on 26
July 2024, which represents a 3.93 per cent. premium to the 3-month Volume
Weighted Average Price and a 17.32 per cent. premium to the 6-month Volume
Weighted Average Price to 8 August 2024, being the last practicable date prior
to the publication of the Circular.

·    the Exit Opportunity shall remain open from 9 August 2024 until 1:00
p.m. on 11 September 2024.

 

The completion of the Exit Opportunity and therefore the purchase of Ordinary
Shares from Minority Shareholders by Crown Ocean Capital is conditional upon
the Resolutions being passed at the General Meeting.

 

The Exit Opportunity is being provided independently of the Company by Crown
Ocean Capital and the Company has not entered into any agreements with Crown
Ocean in connection with the Cancellation or Exit Opportunity.

 

Further details of the Exit Opportunity and how Minority Shareholders can
participate, should they so wish, are contained in the Circular.

Reasons for the Cancellation

 

Bowleven is headquartered in the UK and focused on Africa, where it holds an
exploration and development interest in offshore Cameroon. Bowleven holds a 25
per cent. strategic equity interest in the offshore shallow water Etinde
Permit. In recent years, the Company has been supporting its Joint Venture
Partners to progress the proposed development plan for the Etinde Permit to a
final investment decision ("FID"), at which stage the Company will be entitled
to receive a milestone payment from its Joint Venture Partners.

 

Since June 2022, when the Company's Joint Venture Partner for the Etinde
Permit, New Age, agreed to sell its 37.5 per cent. stake and operatorship in
the Etinde Permit, no definitive Etinde Permit work plan or budget was
approved by the Joint Venture Partners. Monthly expenditure in relation to the
Etinde Permit remained low during this period as New Age operated the business
on a largely suspended care and maintenance operations basis. On 25 January
2024, New Age confirmed to the JV Partners that the sale of its stake had been
terminated.

 

Etinde operations remain on a care and maintenance basis with limited ongoing
activity other than New Age's maintenance of the Cameroon project office. As
outlined in the Company's interim results for the period to 31 December 2023,
the JV Partners have agreed an outline for a way forward following the New Age
stake sale being terminated, but progress has been very slow and Bowleven had
a need to complete the $2m fundraise announced on 14 March 2024 to in order to
fund its overheads and its share of Etinde expenditure at the project through
to approximately mid-2025, subject to the level of activity and expenditure
relating to the Etinde Permit.

 

Whilst future project expenditure cannot be forecasted accurately at this
point in time, as it is contingent on the agreement of the JV Partners and the
approval of SNH and the Government of Cameroon to a development plan and the
timing of an increase in project activities to reach future FID, limited
progress has been made at Etinde since the Open Offer was completed and the
Board of Bowleven does not expect there to be material progress towards FID by
mid-2025. As set out at the time of the Open Offer, the Company is likely to
need further capital to be in a position to fund its obligations and
liabilities during the period it will take to reach FID, and the receipt of
the $25 million payment due to the Company once FID is reached. Accordingly,
the Board have been considering the Company's future requirement to raise
capital and have been evaluating all possible means of reducing the cost base
of the business in order to extend the Company's cash runway as much as
possible, whilst still maintaining appropriate governance arrangements and
allowing it to contribute to its share of the development costs at Etinde.

 

As part of this process, the Board has extensively reviewed and evaluated the
benefits and drawbacks for the Company and its Shareholders in retaining the
admission to trading of the Ordinary Shares on AIM.  The Board has taken into
consideration numerous factors, both positive and negative, and considered the
interests of all Shareholders in reaching its decision.  Following this
review, the Board has concluded that the continued admission to trading of the
Ordinary Shares on AIM is not appropriate and, accordingly, the Cancellation
and Re-registration are in the best interests of the Company and its
Shareholders as a whole for the reasons set out below.

 

·    Costs and regulatory burden:  the considerable cost and management
time and the legal and regulatory burden associated with maintaining the
Company's admission to trading on AIM is, in the Board's opinion,
disproportionate to the benefits of the Company's continued admission to
trading on AIM, particularly given the limited and inconsistent liquidity in
the Ordinary Shares as described below.  Given the lower costs associated
with private limited company status, the Cancellation and Re-registration is
expected to substantially reduce the Company's recurring administrative,
adviser costs, listing fees and insurance premiums, which the Board believes
can be better spent supporting the Group's business and investing in Etinde.
Further, the reduced administrative burden associated with a de-listing of the
Company underpins the Board's focus on the monetisation of Etinde. Alongside
the Cancellation, the Directors intend to reduce their salaries or fees;

 

·    Access to appropriate finance:  the nature of the Group's operations
requires the Company to periodically raise funding for working capital and
project expenditure as the Company seeks to support the development of
Etinde.  If Etinde is to be developed, the Board considers that significant
external funding will be required to enable the Company to fund its
obligations. Having considered a range of financing options in the lead up to
the Open Offer, the Directors are of the opinion that raising further
significant equity through the public market would be challenging in the short
or medium term, and if it were, potentially might not be on acceptable terms
for all stakeholders. The Board has concluded that as a private limited
company it may have broader access to specialist investors and enhance the
ability of the Company to raise the capital required to fund its overheads and
support activity at Etinde for the benefit of all Shareholders.

 

·    Corporate and strategic flexibility:  the Board believes that a
private limited company can take and implement strategic decisions more
quickly than a company which is publicly traded as a result of the more
flexible regulatory regime that is applicable to a private company.  The
Board believes that this will be advantageous in the Group's business
development discussions as it pertains to accessing a wider spectrum of
potential investors who prefer private company investments; and

 

·    Limited liquidity in the Ordinary Shares and high share price
volatility: there continues to be limited and inconsistent liquidity in the
Ordinary Shares, as a result of which small trades in the Ordinary Shares can
have a significant impact on price and, therefore, on the market valuation of
the Company.  The Board believes that this, in turn, has a materially adverse
impact on the Company's ability to seek appropriate financing or realise an
appropriate value for any material future transactions. Moreover, the limited
liquidity in the Ordinary Shares, together with the limited free float, makes
it challenging for Shareholders of any size to acquire additional Ordinary
Shares or dispose of any Ordinary Shares in the market at an attractive price.

 

Notwithstanding the Board's conclusions about its AIM quotation, the Company's
long-term strategy remains to be a major oil and gas producer in Cameroon. The
Company remains committed to Cameroon and the Board continues to be of the
view that Etinde is a potentially substantial energy asset and core to the
Company's strategy.  Accordingly, following the Cancellation, the Company
intends to continue to fund its portion of the Etinde costs pursuant to the
JOA. The Company's strategic intention to monetize Etinde for the benefit of
all Shareholders will remain the overriding objective and will necessarily
involve collaboration with the Etinde JV Partners to secure FID.

 

The General Meeting

 

The General Meeting will be held on 28 August 2024 at 11:00 a.m. at The Office
Group, Borough Yards, 13 Dirty Lane, London, SE1 9PA.

 

The Cancellation and Re-registration are conditional upon the respective
Resolutions being passed at the General Meeting. The Company is also seeking
Shareholder approval at the General Meeting for the adoption of the New
Articles. Subject to the approval of the Cancellation, the Company will take
steps to cancel the admission of its Ordinary Shares to trading on AIM, such
that the Company will no longer be listed on any regulated exchange. If the
Cancellation Resolution is passed at the General Meeting, it is anticipated
that the Cancellation will become effective at 7.00 a.m. on 24 September 2024.
The Cancellation Resolution is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of Shareholders holding not less than 75 per cent. of
the votes cast by Shareholders (whether present in person or by proxy) at the
General Meeting.

 

The Circular will set out the background to, the reasons for, and the
implications of, Cancellation and will explain why the Board considers the
Cancellation, the Re-registration and the adoption of the New Articles to be
in the best interests of Shareholders as a whole.

 

The Board considers the Cancellation, the Re-registration and the adoption of
the New Articles to be in the best interests of Shareholders as a whole.
Accordingly, the Board recommends that Shareholders vote in favour of the
Resolutions.

 

The Board also considers it appropriate that those Minority Shareholders who
are unable or unwilling to hold shares in the Company following the
Cancellation should be given an opportunity to realise their investment under
the Exit Opportunity.  However, the Board makes no recommendation to Minority
Shareholders in relation to their participation in the Exit Opportunity.
Minority Shareholders should Minority Shareholders should consider whether the
Ordinary Shares remain a suitable investment in light of their own personal
circumstances and investment objectives and consult their duly authorised
independent advisers before they make a decision as to whether to sell some,
all, or none of their Ordinary Shares pursuant to the Exit Opportunity, in
order to obtain advice relevant to their particular circumstances. The
Directors refer Minority Shareholders to certain pros and cons of the Exit
Opportunity which are set out in the Circular.

 

Irrevocable undertakings

 

The Board has received an irrevocable undertaking from Crown Ocean Capital
(representing approximately 58.33 per cent. of the Ordinary Shares (excluding
shares held in treasury)), to vote in favour of the Resolutions. The
irrevocable undertaking from Crown Ocean Capital also provides Crown Ocean
Capital's undertaking to provide the Exit Opportunity on the terms and
conditions set out in the Circular. The Board has also received an irrevocable
undertaking from Eli Chahin, the Company's Chief Executive Officer,
(representing approximately 0.35 per cent. of the Ordinary Shares (excluding
shares held in treasury)), to vote in favour of the Resolutions. Therefore,
the Company has received irrevocable undertakings totalling in aggregate 58.68
per cent. of the Company's issued ordinary share capital (excluding shares
held in treasury) to vote in favour of the Resolutions.

 

Matched Bargain Facility

 

The Company is making arrangements for a Matched Bargain Facility to assist
Shareholders to trade in the Ordinary Shares following Cancellation, if the
Resolutions are passed. The Matched Bargain Facility will be provided by J P
Jenkins. J P Jenkins is an appointed representative of Prosper Capital LLP,
which is authorised and regulated by the FCA.

 

The Matched Bargain Facility is expected to operate for a minimum of 12 months
after the Cancellation. The Directors' current intention is that it will be
put in place and continue beyond that time; however, Shareholders should note
that there is a risk that the Matched Bargain Facility may not be put in place
and it could be withdrawn and there can be no guarantee that the Matched
Bargain Facility will be kept in place indefinitely, which could inhibit the
ability to trade the Ordinary Shares.

 

Further information on the Matched Bargain Facility can be found in the letter
from the Chairman of the Company, extracted from the Circular, which is set
out in Appendix II to this announcement.

 

The expected timetable for the Cancellation, Re-registration and Exit
Opportunity is set out in Appendix I to this announcement and a letter from
the Chairman of the Company, extracted from the Circular, is set out in
Appendix II to this announcement. The Circular, form of proxy and an
application form in connection with the Exit Opportunity will be sent to
Shareholders later today. A copy of this announcement and the Circular and the
New Articles will also be made available on the Company's website later today
at: www.bowleven.com (http://www.bowleven.com)

 

The person responsible for the release of this announcement on behalf of the
Company is Eli Chahin, Chief Executive Officer.

 

Eli Chahin, Chief Executive Officer, Bowleven Plc commented:

 

"The Board continues to be of the view that Etinde is a potentially
substantial energy asset and core to the Company's strategy. The Board has
been considering the Company's capital requirements in light of the
anticipated development of the Etinde project, and has been evaluating all
possible means of reducing the cost base of the business in order to extend
the Company's cash runway, whilst still maintaining appropriate governance
arrangements and allowing it to contribute to its share of the development
costs at Etinde.

 

Whilst it has been a difficult decision to reach, having taken into account
all relevant factors, the Board believes that pursuing the Cancellation is in
the Company's best interests, to allow Bowleven to further reduce its
overheads and provide financing and operational flexibility as it pursues its
objective of monetising and generating value from its Etinde interest."

 

Capitalised terms used but not defined in this announcement shall have the
same meaning given to such term in the Circular.

 

ENQUIRIES

 

For further information, please contact:

 

 Bowleven plc
 Eli Chahin, Chief Executive       00 44 20 3327 0150

 Camarco (Financial PR)
 Owen Roberts                      00 44 20 3757 4980
 Hugo Liddy

 Shore Capital (NOMAD and Broker)
 Daniel Bush                       00 44 20 7408 4090

 Rachel Goldstein

 

Appendix I

Expected Timetable of Principal Events(1)

 

 

 Announcement of the proposed Cancellation and the Exit Opportunity               9 August 2024

 Posting of this document, Forms of Proxy and Exit Opportunity Participation      9 August 2024
 Forms

 Notice of the proposed Cancellation provided in accordance with AIM Rule 41      9 August 2024

 Exit Opportunity opens                                                           9 August 2024

 Latest time and date for receipt of completed Forms of Proxy to be valid at      11:00 a.m. on 23 August 2024
 the General Meeting

 Time and date of the General Meeting                                             11:00 a.m. on 28 August 2024

 Result of General Meeting announced through RIS                                  28 August 2024

 Exit Opportunity closes                                                          1:00 p.m. on 11 September 2024

 Expected latest date for payment of consideration in relation to valid tenders                             11 September 2024
 in the Exit Opportunity received on or before 28 August 2024

 Company's announcement of number of Shares sold pursuant to the Exit             12 September 2024
 Opportunity

 Expected last day of dealings in the Ordinary Shares on AIM                      23 September 2024

 Expected time and date of the Cancellation*                                      7.00 a.m. on 24 September 2024

 Expected date for the commencement of the Matched Bargain Facility               24 September 2024

 Expected date of payment of consideration in relation to valid tenders in the    Within 14 calendar days of acceptance of the Exit Opportunity
 Exit Opportunity received after 28 August 2024 and before the Exit Opportunity
 Closes

 Expected date of Re-registration as a private limited company**                  On or around 25 September 2024

 

Notes:

1.    Each of the times and dates in the above timetable are subject to
change. If any of the above times or dates change, the revised times or dates
will be notified to Shareholders by means of an announcement made through a
Regulatory Information Service (as defined in the AIM Rules). All references
to times in this document are to London times unless otherwise stated.

*                The Cancellation requires the approval of not
less than 75 per cent. of the votes cast by Shareholders, whether voting in
person or by proxy, at the General Meeting.

**              Re-registration requires the approval of not less
than 75 per cent. of the votes cast by Shareholders, whether voting in person
or by proxy, at the General Meeting.

 

 

 

Appendix II

Extract from the Circular

 

The following is derived from the Chairman's letter included in the Circular,
which is expected to be posted to Shareholders later today, and is subject to
change.

 

 

 

 

1.    Introduction

Earlier today, the Company announced the intended cancellation of the
admission of its Ordinary Shares to trading on AIM and for the Company to be
re-registered as a private limited company. It also announced details of an
exit opportunity for Minority Shareholders, to be provided by Crown Ocean
Capital in connection with the proposed Cancellation.

 

After careful consideration of the merits of the Company's quotation, for the
reasons set out in paragraph 2 below, the Board has concluded that it is in
the best interests of the Company and its Shareholders to seek the
Cancellation and Re-registration. Whilst the Board expresses no recommendation
on the Exit Opportunity, the Board considers it constructive for Minority
Shareholders to be provided with a liquidity opportunity alongside the
proposed Cancellation, which Crown Ocean has offered to provide, by way of the
Exit Opportunity. This letter sets out the reasons for, and implications of,
the proposed Cancellation and Reregistration, and provides further details on
the expected process for the Cancellation, Re-registration and Exit
Opportunity.

 

The Cancellation and Re-registration are conditional upon the respective
Resolutions being passed at the General Meeting to be held at 11.00 a.m. on 28
August 2024, notice of which is set out at Part 5 of this document. The
Company is also seeking Shareholder approval at the General Meeting for the
adoption of the New Articles. Subject to the approval of the Cancellation, the
Company will take steps to cancel the admission of its Ordinary Shares to
trading on AIM, such that the Company will no longer be listed on any
regulated exchange. If the Cancellation Resolution is passed at the General
Meeting, it is anticipated that the Cancellation will become effective at 7.00
a.m. on 24 September 2024. The Cancellation Resolution is conditional,
pursuant to Rule 41 of the AIM Rules, upon the approval of Shareholders
holding not less than 75 per cent. of the votes cast by Shareholders (whether
present in person or by proxy) at the General Meeting.

 

Crown Ocean Capital and Eli Chahin have irrevocably undertaken to vote their
Ordinary Shares in favour of the Resolutions, representing in aggregate
approximately 58.68 per cent. of the Ordinary Shares, as further explained in
paragraph 14 below.

 

The Exit Opportunity is conditional upon the approval of the Resolutions at
the General Meeting and will be open for acceptance from 9 August 2024 until
1.00 p.m. on 11 September 2024.

 

Pursuant to Rule 41 of the AIM Rules, the Company, through its Nominated
Adviser, Shore Capital, has notified the London Stock Exchange of the date of
the proposed Cancellation.

 

The purpose of this document is to explain the background to, and the reasons
for, the Proposals and to explain the consequences of the Proposals and
provide reasons why the Directors consider the Proposals are in the best
interests of the Company and its Shareholders as a whole.

 

2.    Reasons for the Cancellation

Bowleven is headquartered in the UK and focused on Africa, where it holds an
exploration and development interest in offshore Cameroon. Bowleven holds a 25
per cent. strategic equity interest in the offshore shallow water Etinde
Permit. In recent years, the Company has been supporting its Joint Venture
Partners to progress the proposed development plan for the Etinde Permit to a
final investment decision ("FID"), at which stage the Company will be entitled
to receive a milestone payment from its Joint Venture Partners.

 

Since June 2022, when the Company's Joint Venture Partner for the Etinde
Permit, New Age, agreed to sell its 37.5 per cent. stake and operatorship in
the Etinde Permit, no definitive Etinde Permit work plan or budget was
approved by the Joint Venture Partners. Monthly expenditure in relation to the
Etinde Permit remained low during this period as New Age operated the business
on a largely suspended care and maintenance operations basis. On 25 January
2024, New Age confirmed to the JV Partners that the sale of its stake had been
terminated.

 

Etinde operations remain on a care and maintenance basis with limited ongoing
activity other than New Age's maintenance of the Cameroon project office. As
outlined in the Company's interim results for the period to 31 December 2023,
the JV Partners have agreed an outline for a way forward following the New Age
stake sale being terminated, but progress has been very slow and Bowleven had
a need to complete the $2m fundraise announced on 14 March 2024 to in order to
fund its overheads and its share of Etinde expenditure at the project through
to approximately mid-2025, subject to the level of activity and expenditure
relating to the Etinde Permit.

 

Whilst future project expenditure cannot be forecasted accurately at this
point in time, as it is contingent on the agreement of the JV Partners and the
approval of SNH and the Government of Cameroon to a development plan and the
timing of an increase in project activities to reach future FID, limited
progress has been made at Etinde since the Open Offer was completed and the
Board of Bowleven does not expect there to be material progress towards FID by
mid-2025. As set out at the time of the Open Offer, the Company is likely to
need further capital to be in a position to fund its obligations and
liabilities during the period it will take to reach FID, and the receipt of
the $25 million payment due to the Company once FID is reached. Accordingly
the Board have been considering the Company's future requirement to raise
capital and have been evaluating all possible means of reducing the cost base
of the business in order to extend the Company's cash runway as much as
possible, whilst still maintaining appropriate governance arrangements and
allowing it to contribute to its share of the development costs at Etinde.

 

As part of this process, the Board has extensively reviewed and evaluated the
benefits and drawbacks for the Company and its Shareholders in retaining the
admission to trading of the Ordinary Shares on AIM. The Board has taken into
consideration numerous factors, both positive and negative, and considered the
interests of all Shareholders in reaching its decision. Following this review,
the Board has concluded that the continued admission to trading of the
Ordinary Shares on AIM is not appropriate and, accordingly, the Cancellation
and Re-registration are in the best interests of the Company and its
Shareholders as a whole for the reasons set out below.

 

Notwithstanding the Board's conclusions about its AIM quotation, the Company's
long-term strategy remains to be a major oil and gas producer in Cameroon. The
Company remains committed to Cameroon and the Board continues to be of the
view that Etinde is a potentially substantial energy asset and core to the
Company's strategy. Accordingly, following the Cancellation, the Company
intends to continue to fund its portion of the Etinde costs pursuant to the
JOA. The Company's strategic intention to monetize Etinde for the benefit of
all Shareholders will remain the overriding objective and will necessarily
involve collaboration with the Etinde JV Partners to secure FID.

 

·    Costs and regulatory burden: the considerable cost and management
time and the legal and regulatory burden associated with maintaining the
Company's admission to trading on AIM is, in the Board's opinion,
disproportionate to the benefits of the Company's continued admission to
trading on AIM, particularly given the limited and inconsistent liquidity in
the Ordinary Shares as described below. Given the lower costs associated with
private limited company status, the Cancellation and Reregistration is
expected to substantially reduce the Company's recurring administrative,
adviser costs, listing fees and insurance premiums, which the Board believes
can be better spent supporting the Group's business and investing in Etinde.
Further, the reduced administrative burden associated with a de-listing of the
Company underpins the Board's focus on the monetisation of Etinde. Alongside
the Cancellation, the Directors intend to reduce their salaries or fees;

 

·    Access to appropriate finance: the nature of the Group's operations
requires the Company to periodically raise funding for working capital and
project expenditure as the Company seeks to support the development of Etinde.
If Etinde is to be developed, the Board considers that significant external
funding will be required to enable the Company to fund its obligations. Having
considered a range of financing options in the lead up to the Open Offer, the
Directors are of the opinion that raising further significant equity through
the public market would be challenging in the short or medium term, and if it
were, potentially might not be on acceptable terms for all stakeholders. The
Board has concluded that as a private limited company it may have broader
access to specialist investors and enhance the ability of the Company to raise
the capital required to fund its overheads and support activity at Etinde for
the benefit of all Shareholders.

 

·    Corporate and strategic flexibility: the Board believes that a
private limited company can take and implement strategic decisions more
quickly than a company which is publicly traded as a result of the more
flexible regulatory regime that is applicable to a private company. The Board
believes that this will be advantageous in the Group's business development
discussions as it pertains to accessing a wider spectrum of potential
investors who prefer private company investments; and

 

·    Limited liquidity in the Ordinary Shares and high share price
volatility: there continues to be limited and inconsistent liquidity in the
Ordinary Shares, as a result of which small trades in the Ordinary Shares can
have a significant impact on price and, therefore, on the market valuation of
the Company. The Board believes that this, in turn, has a materially adverse
impact on the Company's ability to seek appropriate financing or realise an
appropriate value for any material future transactions. Moreover, the limited
liquidity in the Ordinary Shares, together with the limited free float, makes
it challenging for Shareholders of any size to acquire additional Ordinary
Shares or dispose of any Ordinary Shares in the market at an attractive price.

 

Therefore, as a result of this review, the Board has unanimously concluded
that the proposed Cancellation and Re-registration are in the best interests
of the Group and its Shareholders as a whole.

 

3.    Minority Shareholders and the Exit Opportunity

As at the close of business on 8 August 2024 (being the latest practicable
date prior to the publication of this document):

 

·    Crown Ocean Capital holds an interest in 1,099,987,924 Ordinary
Shares representing 58.33 per cent. of the existing issued Ordinary Shares
(excluding shares held in treasury) and voting rights in the Company; and

 

·    the Minority Shareholders hold, in aggregate, 41.32 per cent. of the
existing issued Ordinary Shares (excluding shares held in treasury) and voting
rights in the Company.

 

The Cancellation would materially affect the position of the Minority
Shareholders in the Company. In particular, both the Board and Crown Ocean
Capital recognise that cancelling the trading of the Ordinary Shares on AIM
will make it considerably more difficult for Shareholders to sell or buy
Ordinary Shares should they wish to do so.

 

As Crown Ocean Capital currently holds more than 50 per cent. of the Company's
voting rights, it is able to acquire further interests in Ordinary Shares
without incurring any obligation to make a general offer to all shareholders
under Rule 9 of the Takeover Code. Crown Ocean Capital has therefore agreed to
provide the Exit Opportunity to Minority Shareholders, to enable Minority
Shareholders to sell their Ordinary Shares in the Company to Crown Ocean
Capital, in advance of the Cancellation taking effect. Crown Ocean Capital has
not undertaken to provide a dealing facility or similar trading arrangement
following the Cancellation.

 

The terms of the Exit Opportunity are:

 

·    a purchase price of 0.225 pence per Ordinary Share in respect of
Ordinary Shares listed on AIM which was determined as the closing price on 26
July 2024, which represents a 3.93 per cent. premium to the 3-month Volume
Weighted Average Price and a 17.32 per cent. premium to the 6-month Volume
Weighted Average Price to 8 August 2024, being the last practicable date prior
to the publication of this document; and

 

·    the Exit Opportunity shall remain open from 9 August 2024 until 1.00
p.m. on 11 September 2024.

 

Minority Shareholders who wish to sell their Ordinary Shares to Crown Ocean
Capital pursuant to the Exit Opportunity should refer to Section 5 below.

 

The Directors make no recommendation to Minority Shareholders in relation to
their participation in the Exit Opportunity. Minority Shareholders should
consider whether the Ordinary Shares remain a suitable investment in light of
their own personal circumstances and investment objectives, and the Directors
refer Minority Shareholders to certain pros and cons of the Exit Opportunity
in paragraph 16 below. Minority Shareholders do not have to sell any Ordinary
Shares pursuant to the Exit Opportunity if they do not wish to do so. However,
Minority Shareholders who elect not to sell their Ordinary Shares Pursuant to
the Exit Opportunity or otherwise in the market by other means prior to the
Cancellation will, on completion of the Cancellation and Re-registration, hold
Ordinary Shares in a private limited company, with limited liquidity. In light
of this, in the event the Cancellation is approved and becomes effective, the
Company will implement the Matched Bargain Facility, which would facilitate
Shareholders buying and selling Ordinary Shares on a matched bargain basis
following the Cancellation. Further details of the Matched Bargain Facility
are set out in Section 9 below.

 

As set out in the Expected Timetable of Principal Events section of this
document, the Exit Opportunity will remain open for 33 days, including 14 days
from the time of the General Meeting.

 

4.    Conditionality of the Exit Opportunity

The completion of the Exit Opportunity and therefore the purchase of Ordinary
Shares from Minority Shareholders by Crown Ocean Capital is conditional upon
the Resolutions being passed at the General Meeting.

 

5.    Participation in the Exit Opportunity

For Minority Shareholders who hold their Ordinary Shares in certificated form,
please refer to Part 3 of this document for full details as to how to
participate in the Exit Opportunity. A summary of the process for acceptance
is included below:

 

·    Minority Shareholders who hold their Ordinary Shares in certificated
form who wish to participate in the Exit Opportunity should complete the Exit
Opportunity Participation Form as soon as possible in accordance with the
instructions set out therein and return the completed Exit Opportunity
Participation Form by post to Computershare Investor Services PLC at The
Pavilions, Bridgwater Road, Bristol, BS99 6AH to arrive no later than 1.00
p.m. on 11 September 2024. A pre-paid reply envelope for use in the United
Kingdom is enclosed for your convenience.

 

·    Minority Shareholders who hold Ordinary Shares in CREST who wish to
participate in the Exit Opportunity should comply with the procedures set out
in the Part 3 of this document headed "Procedures for Minority Shareholders
selling Ordinary Shares" in respect of transferring uncertificated Ordinary
Shares in escrow through CREST. The Transfer to Escrow instruction must settle
by no later than 1.00 p.m. on 11 September 2024.

 

Shareholders who return an Exit Opportunity Participation Form or who complete
an acceptance in CREST

are still permitted to vote their Ordinary Shares at the General Meeting and
so should also return a Form of

Proxy as set out in Section 12 below.

 

Pursuant to Rule 35.3 of the Takeover Code, except with the consent of the
Panel, within 6 months of the closure of the Exit Opportunity, Crown Ocean
Capital will not be able to acquire any interest in Ordinary Shares
(https://url.uk.m.mimecastprotect.com/s/aO2yCxkpyIx2gJzT8fWuyCXdu?domain=code.thetakeoverpanel.org.uk)
 in the Company on more favourable terms than those made available under the
Exit Opportunity.

 

6.    Payment of Consideration

The following methods and currencies will be available for the payment of the
purchase price in respect of the Exit Opportunity:

 

·    to Minority Shareholders who hold their Ordinary Shares in
certificated form will be made, by way of cheque, in £; and

 

·    to Minority Shareholders who hold their Ordinary Shares in CREST will
be made through CREST, by Computershare Investor Services PLC (on behalf of
Crown Ocean Capital) procuring the creation of a payment obligation in favour
of the payment banks of accepting Shareholders in accordance with the CREST
payment arrangements, in £.

 

7.    Re-registration

 Following the proposed Cancellation, the Board believes that the
requirements and associated costs of the Company maintaining its public
company status will be difficult to justify and that the Company will benefit
from the more flexible requirements and lower overhead costs associated with
private limited company status. It is therefore proposed to re-register the
Company as a private limited company.

 

In connection with the Re-registration, it is proposed that the New Articles
be adopted to reflect the change in the Company's status to a private limited
company. The principal effects of the adoption of the New Articles on the
rights and obligations of Shareholders and the Company are summarised in Part
2 of this document and a copy of the New Articles, is available on the
Company's website at the following link (and will also be available for
inspection at the General Meeting): www.bowleven.com (http://www.bowleven.com)
.

 

Subject to and conditional upon the Cancellation and the passing of the
Re-registration Resolution, an application will be made to the Registrar of
Companies for the Company to be re-registered as a private limited company.
Re-registration will take effect when the Registrar of Companies issues a
certificate of incorporation on Re-registration. The Registrar of Companies
will not issue the certificate of incorporation on Re-registration until the
Registrar of Companies is satisfied that no valid application can be made to
cancel the resolution to re-register as a private limited company. Any such
application must be made within 28 days after the passing of the
Re-Registration resolution and may be made on behalf of the persons entitled
to make it by such one or more of their number as they may appoint for the
purpose.

 

Under the Act, it is a requirement that Re-registration and adoption of the
New Articles must be approved by not less than 75 per cent. of votes cast by
shareholders at a general meeting. Accordingly, the Notice of General Meeting
set out at Part 5 of this document contains special resolutions to approve the
Cancellation, Re-registration and the adoption of the New Articles.

 

If the Re-registration Resolution is passed at the General Meeting and the
Registrar of Companies issues a certificate of incorporation on
Re-registration, it is anticipated that the Re-registration will become
effective by 25 September 2024.

 

8.    Process for the Cancellation

Under Rule 41 of the AIM Rules, it is a requirement that the Cancellation must
be approved by not less than 75 per cent. of votes cast by shareholders at a
general meeting. In addition, any AIM quoted company that wishes for the
London Stock Exchange to cancel the admission of its shares to trading on AIM
is required to notify shareholders and to separately inform the London Stock
Exchange of its preferred cancellation date at least 20 Business Days prior to
such date.

 

Accordingly, the Board are hereby convening the General Meeting to vote on the
Cancellation Resolution and have notified the London Stock Exchange of the
Company's intention, subject to the Cancellation Resolution being passed at
the General Meeting, to cancel the Company's admission of the Ordinary Shares
to trading on AIM on 24 September 2024. The Cancellation will not take effect
until at least five clear Business Days have passed following the passing of
the Cancellation Resolution and a dealing notice has been issued.

 

If the Cancellation Resolution is passed at the General Meeting, it is
proposed that the last day of trading in Ordinary Shares on AIM will be 23
September 2024 and that the Cancellation will take effect at 7.00 a.m. on 24
September 2024.

 

As set out in Section 13 below:

 

·    Crown Ocean Capital, the Company's largest shareholder, which is
currently interested in approximately 58.33 per cent. of the Ordinary Shares;
and

 

·    Eli Chahin, the Company's Chief Executive Officer, (who is currently
interested in approximately 0.35 per cent. of the Ordinary Shares),

 

have each given an irrevocable undertaking to the Company to vote in favour of
the Resolutions. As a result, the Board considers it likely that the
Resolutions will be passed at the General Meeting. This does not, however,
preclude Shareholders from attending and voting (whether in person or proxy)
at the General Meeting.

 

9.    Principal effects of the Cancellation and Matched Bargain Facility

Principal effects of the Cancellation

The Board considers that, in deciding whether or not to vote in favour of the
Cancellation, Minority Shareholders should take their own independent advice
and consider carefully the disadvantages and advantages of the Cancellation
(including, but not limited to, those set out below) in light of their own
financial circumstances and investment objectives.

 

The principal effects of the Cancellation will include the following:

 

(i)  there will no longer be a formal market mechanism enabling Shareholders
to trade their Ordinary Shares on AIM or any other recognised market or
trading exchange (other than the limited off-market mechanism that will be
provided by the Matched Bargain Facility) and no price will be publicly quoted
for the Ordinary Shares;

 

(ii) in the absence of a formal market and quoted price, it may be difficult
for Shareholders to determine the market value of their investment in the
Company at any given time;

 

(iii) the Ordinary Shares may be more difficult to sell compared to shares of
companies traded on AIM (or any other recognised market or trading exchange);

 

(iv) it is possible that, following the publication of this document, the
liquidity and marketability of the Ordinary Shares may be significantly
reduced and their value adversely affected (however, as set out above, the
Directors believe that the existing liquidity in the Ordinary Shares is, in
any event, limited);

 

(v) the Company will be a private limited company registered with the
Registrar of Companies in Scotland in accordance with and subject to the
Companies Act 2006 and the New Articles.

 

(vi) the regulatory and financial reporting regime applicable to companies
whose shares are admitted to trading on AIM will no longer apply and the
Company will no longer be required to comply with the AIM Rules (and
accordingly, Shareholders will no longer be afforded the protections given by
the AIM Rules). In particular, and among other things:

 

(A) the Company will not be required to make any public announcements of price
sensitive information or material events, announce its interim or final
results, comply with any of the corporate governance practices applicable to
AIM companies, announce substantial transactions and related party
transactions, comply with the requirement to obtain shareholder approval for
reverse takeovers and fundamental changes in the Company's business, or
maintain a website containing the information required by the AIM Rules;

 

(B) Shore Capital & Corporate Limited will cease to be the Company's
nominated adviser and the Company will cease to retain a nominated adviser,
and Shore Capital Stockbrokers Limited will cease to be the Company's broker
and the Company will cease to retain a broker.

 

(vii) the levels of disclosure and corporate governance within the Company may
not be as stringent as for a company quoted on AIM;

 

(viii) the Company will no longer be subject to UK MAR regulating inside
information (among other things);

 

(ix) the Company will no longer be subject to the Disclosure Guidance and
Transparency Rules and will therefore, among other things, no longer be
required to publicly disclose major shareholdings in the Company;

 

(x) whilst it is expected that the Company's CREST facility will remain in
place immediately post the Cancellation becoming effective, the Company's
CREST facility may be cancelled in the future and, although the Ordinary
Shares will remain transferable following the Cancellation, they may cease to
be transferable through CREST (in which case, Shareholders who hold Ordinary
Shares in CREST will receive share certificates);

 

(xi) the Board currently proposes to procure that the Company continues to
maintain its website www.bowleven.com and to post updates on that website from
time to time, although as described above, Shareholders should be aware that
there will be no obligation on the Company to include the information required
under Rule 26 of the AIM Rules or to make announcements and/or update the
website as required by the AIM Rules and there is no obligation on the Company
or future Board directors to maintain the website or post updates to it;

 

(xii) the Cancellation might have either positive or negative taxation
consequences for Shareholders. Shareholders who are in any doubt about their
tax position should consult their own professional independent adviser
immediately.

 

(xiii) following the Cancellation, all transfers of Ordinary Shares will be
liable for stamp duty or SDRT (unless a relevant exemption or relief applies
to a particular transfer); and

 

(xiv) following the Cancellation and Re-registration it is expected that the
Company will no longer remain subject to the Takeover Code, in relation to
which further details are set in Section 10 below.

 

There will be no change to the composition of the Board immediately following
the Cancellation and

Re-registration.

 

The above considerations are not exhaustive and Shareholders should seek their
own independent advice when assessing the likely impact of the Cancellation on
them, and their shareholding in the Company and whether or not to vote in
favour of the Cancellation.

 

Matched Bargain Facility

 

The Directors are aware that Shareholders may wish to acquire or dispose of
Ordinary Shares in the Company following the Cancellation, to the extent that
they haven't availed themselves of the Exit Opportunity in full or sold their
shares on AIM before the Cancellation takes effect. Should the Cancellation
Resolution be approved by Shareholders at the General Meeting, the Company is
seeking to implement a Matched Bargain Facility which is to be provided by J P
Jenkins. J P Jenkins is an appointed representative of Prosper Capital LLP,
which is authorised and regulated by the FCA.

 

Under the Matched Bargain Facility, Shareholders or persons wishing to acquire
or dispose of Ordinary Shares will be able to leave an indication with J P
Jenkins, through their stockbroker (J P Jenkins is unable to deal directly
with members of the public), of the number of Ordinary Shares that they are
prepared to buy or sell at an agreed price. In the event that J P Jenkins is
able to match that order with an opposite sell or buy instruction, it would
contact both parties and then effect the bargain (trade).  Shareholdings
remain in CREST and can be traded during normal business hours via a UK
regulated stockbroker. Should the Cancellation become effective and the
Company puts in place the Matched Bargain Facility, details will be made
available to Shareholders on the Company's website at www.bowleven.com.

 

The Matched Bargain Facility is expected to operate for a minimum of 12 months
after the Cancellation.  The Directors' current intention is that it will be
put in place and continue beyond that time; however, Shareholders should note
that there is a risk that it may not be put in place and could be withdrawn
and there can be no guarantee that the Matched Bargain Facility will be kept
in place indefinitely, which could inhibit the ability to trade the Ordinary
Shares.  Further details will be communicated to the Shareholders at the
relevant time.

 

If Shareholders wish to buy or sell Ordinary Shares prior to the Cancellation
becoming effective, they can either participate in the Exit Opportunity (in
respect of a sale of their Ordinary Shares), or buy or sell shares on or
before the last day of dealings in the Ordinary Shares on AIM. As noted above,
in the event that Shareholders approve the Cancellation, it is anticipated
that the last day of dealings in the Ordinary Shares on AIM will be 23
September 2024 and that the effective date of the Cancellation will be 24
September 2024.

 

10.  Takeover Code

The Takeover Code applies to all offers for companies which have their
registered offices in the United Kingdom, the Channel Islands or the Isle of
Man if any of their equity share capital or other transferable securities
carrying voting rights are admitted to trading on a UK regulated market or a
UK multilateral trading facility or on any stock exchange in the Channel
Islands or the Isle of Man.

 

The Takeover Code currently applies to the Company. However, as noted above,
given Crown Ocean Capital currently holds more than 50 per cent. of the
Company's voting rights, it is able to acquire further interests in Ordinary
Shares without incurring any obligation to make a general offer to all
shareholders under Rule 9 of the Takeover Code.

 

The Takeover Code also applies to all offers for companies (both public and
private) which have their registered offices in the United Kingdom, the
Channel Islands or the Isle of Man and which are considered by the Panel to
have their place of central management and control in the United Kingdom, the
Channel Islands or the Isle of Man, but in relation to private companies only
if one of a number of conditions is met - for example, if the company's shares
were admitted to trading on a UK regulated market or a UK multilateral trading
facility or on any stock exchange in the Channel Islands or the Isle of Man at
any time in the preceding ten years.

 

If the Cancellation and Re-registration are approved by Shareholders at the
General Meeting, the Company will be re-registered as a private company and
its securities will no longer be admitted to trading on a regulated market or
a multilateral trading facility in the United Kingdom. In these circumstances,
the Takeover Code will only apply to the Company if it is considered by the
Panel to have its place of central management and control in the United
Kingdom, the Channel Islands or the Isle of Man. This is known as the
"residency test". In determining whether the residency test is satisfied, the
Panel has regard primarily to whether a majority of a company's directors are
resident in these jurisdictions.

 

The majority of the Directors are currently resident outside the United
Kingdom the Channel Islands or the Isle of Man. Accordingly, the Panel has
confirmed to the Company that, following the Cancellation and Re-registration,
the Takeover Code will cease apply to the Company, and the Company and its
shareholders will therefore not have the benefit of the protections the
Takeover Code affords.

 

This includes the requirement for a mandatory cash offer to be made if either:

 

·    a person acquires an interest in shares which, when taken together
with the shares in which persons acting in concert with it are interested,
increases the percentage of shares carrying voting rights in which it is
interested to 30 per cent. or more; or

 

·    a person, together with persons acting in concert with it, is
interested in shares which in the aggregate carry not less than 30 per cent.
of the voting rights of a company but does not hold shares carrying more than
50 per cent. of such voting rights and such person, or any person acting in
concert with it, acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which it is interested.

 

The Takeover Code could apply to the Company in the ten-year period from the
date of the Re-registration if the composition of the Board, or residency of
the Directors, were to change such that the Company would have its place of
central management and control in the United Kingdom, the Channel Islands or
the Isle of Man. Following the expiry of the ten year period from the date of
the Re-registration, the Company would not in any circumstances be subject to
the provisions of the Takeover Code.

 

However, the Board also notes that if amendments to the Takeover Code proposed
in consultation paper PCP2024/1 (published by the Takeover Panel on 24 April
2024) are adopted, then the Takeover Code would cease to apply to the Company
after a period of 3 years following the implementation of these amendments,
irrespective of the composition of the Board.

 

Brief details of the Panel, and of the protections afforded by the Takeover
Code (which will cease to apply following the Cancellation and
Re-registration), are set out in Part 4 of this document.

 

In the context of the Proposals and the Exit Opportunity, with the agreement
of the Directors of the Company, the Panel has granted certain dispensations
such that this Circular does not comply with all the requirements of an offer
document and the Company is not in an offer period as defined in the Takeover
Code.

 

11.  Director responsibility

 

The Directors, whose names appear on page 6 of this document, accept
individual and collective responsibility for the information contained in this
document (other than the information which describes Crown Ocean Capital or
its intentions, which is the responsibility of the directors of Crown Ocean
Capital), including individual and collective responsibility for compliance
with the AIM Rules. To the best of the knowledge and belief of the Directors
(who have taken all reasonable care to ensure that such is the case), the
information contained in this document for which they accept responsibility is
in accordance with the facts and does not omit anything likely to affect the
import of such information. The directors of Crown Ocean Capital accept
responsibility for any information in this document which describes Crown
Ocean Capital or its intentions. To the best of the knowledge and belief of
Konstantin Stoyanov, Christian Petersmann and Oskar Nilner, being the
directors of Crown Ocean Capital, and who have taken all reasonable care to
ensure that such is the case, the information in this document for which it
accepts responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.

 

12.  Current trading

Since the Company's interim results for the period ended 31 December 2023,
announced on 27 March 2024, and the Company's recently completed open offer
raising gross proceeds of approximately £1.56 million, announced on 3 April
2024, the Group has continued trading without any material changes and
continues to be reliant on the financial support of Crown Ocean Capital.

 

13.  General Meeting actions to be taken

The Cancellation, Re-registration and the adoption of the New Articles
requires the passing of the Cancellation Resolution and the Re-registration
Resolution at the General Meeting. Accordingly, a Notice of the General
Meeting convening a meeting to be held at The Office Group, Borough Yards, 13
Dirty Lane, London, SE1 9PA on 28 August 2024 at 11.00 a.m. is set out at Part
5 of this document.

 

Whether or not you propose to attend the General Meeting, you are requested to
complete the Form of Proxy in accordance with the instructions printed thereon
and return it, duly signed, together with any power of attorney under which it
is executed, as soon as possible but in any event so as to arrive not later
than 11.00 a.m. on 23 August 2024. Completion and return of a Form of Proxy
will not preclude a member from attending and voting at the General Meeting
should they wish. Shareholders who return a completed Exit Opportunity
Participation Form shall still be permitted to vote their shares at the
General Meeting and so should also return a Form of Proxy.

 

14.  Irrevocable undertakings

The Board has received an irrevocable undertaking from Crown Ocean Capital
(representing approximately 58.33 per cent. of the Ordinary Shares), to vote
in favour of the Resolutions which remains binding subject to a long stop date
of 24 September 2024 on which it terminates. The irrevocable undertaking from
Crown Ocean Capital also requires Crown Ocean Capital to provide the Exit
Opportunity on the terms and conditions set out in this document.

 

The Board has received an irrevocable undertaking from Eli Chahin, the
Company's Chief Executive Officer, (representing approximately 0.35 per cent.
of the Ordinary Shares), to vote in favour of the Resolutions which remains
binding subject to a long stop date of 24 September 2024 on which it
terminates.

 

Accordingly, the Board considers it likely that the Resolutions will be passed
at the General Meeting.

 

15.  Director intentions

Eli Chahin, the Company's Chief Executive Officer, will not participate in the
Exit Opportunity.  None of the other Directors hold any Ordinary Shares in
the Company.

 

16.  Recommendation

The Board considers the Cancellation, the Re-registration and the adoption of
the New Articles to be in the best interests of Shareholders as a whole.
Accordingly, the Board recommends that Shareholders vote in favour of the
Resolutions.

 

The Board also considers it appropriate that those Minority Shareholders who
are unable or unwilling to hold shares in the Company following the
Cancellation should be given an opportunity to realise their investment under
the Exit Opportunity.  However, the Board makes no recommendation to Minority
Shareholders in relation to their participation in the Exit Opportunity.
Minority Shareholders should consider whether the Ordinary Shares remain a
suitable investment in light of their own personal circumstances and
investment objectives and consult their duly authorised independent advisers
before they make a decision as to whether to sell some, all, or none of their
Ordinary Shares, in order to obtain advice relevant to their particular
circumstances. The Directors refer Minority Shareholders to certain pros and
cons of the Exit Opportunity below.

 

Nevertheless, Minority Shareholders should, when making their decision whether
or not to avail themselves of the Exit Opportunity, bear in mind, inter alia,
the following:

 

Pros of accepting the Exit Opportunity

·    The loss of the AIM quotation, and resultant loss of liquidity,
should the Cancellation take effect. If the Cancellation is effected,
Shareholders who do not participate in the Exit Opportunity will hold unlisted
Ordinary Shares and, as minority shareholders, would not be afforded the same
level of liquidity as was afforded to them whilst the Company was quoted on
the AIM market of the London Stock Exchange. Consequently, notwithstanding the
Matched Bargain Facility, the liquidity, marketability and realisable value of
the Ordinary Shares could be significantly adversely affected and
Shareholders' ability to dispose of their Ordinary Shares would likely be
materially reduced;

·    The loss of the protections of the AIM Rules, particularly with
regard to approvals and disclosure obligations, should the Cancellation take
effect. Should the Cancellation take effect, the Company will no longer be
subject to the disclosure obligations of UK MAR and Shareholders will not
benefit from the various disclosure obligations and shareholder protections
contained in the AIM Rules, including that the Company will not be required to
make public announcements of price sensitive information or material events,
publish interim results, comply with any of the corporate governance practices
applicable to AIM companies, announce substantial transactions and related
party transactions, comply with the requirement to obtain shareholder approval
for reverse takeovers and fundamental changes in the Company's business, or
maintain a website containing the information required by the AIM Rules;

·    Crown Ocean Capital's controlling shareholding position. Crown Ocean
Capital currently has voting control over the Company and will continue to be
in a position to ensure the approval, or rejection, of ordinary resolutions of
the Company and determine the overall strategy of Bowleven including, for
example, the appointment and removal of directors and the dividend policy or
cessation of any dividends.

·    The expected loss of the protections of the Takeover Code, should the
Cancellation take effect. Following the Cancellation, as the Company's central
management and control will reside outside of the UK, Shareholders will not
benefit from the protections of the Takeover Code, including the requirement
for a mandatory cash offer to be made for all of the Company's Ordinary Shares
where a person acquires an interest in the Ordinary Shares which increases the
percentage of the Ordinary Shares carrying voting rights in which it is
interested to 30 per cent. or more, or which increases an interest of not less
than 30 per cent. but not more than 50 per cent. of the Ordinary Shares
carrying voting rights;

·    The Exit Opportunity purchase price represents a 3.93 per cent.
premium to the 3-month Volume Weighted Average Price and a 17.32 per cent.
premium to the 6-month Volume Weighted Average Price to 8 August 2024; and

 

·    The Exit Opportunity is being made available now and there is no
assurance that any exit opportunity may be made available in future, including
at this price. The Ordinary Shares already have low levels of liquidity and
the Exit Opportunity allows Shareholders to realise their investment in
Bowleven in full in cash.

 

Cons of accepting the Exit Opportunity

·    The Company continues to believe that its interest in the Etinde
Permit represents considerable value over the long-term. The Etinde Permit
lies in shallow water in the prolific Rio del Rey Basin, and contains a number
of liquid-rich gas hydrocarbon reservoirs. Payment of $25m is due to the
Company from the JV Partners once FID is reached on the development of the
Etinde field. The Board believes that value may be realised from the Etinde
Permit as the asset is de-risked and brought closer to development.
Accordingly, those Shareholders willing and able (depending on their
circumstances) to accept the risks associated with remaining as an investor in
an unlisted company controlled by Crown Ocean Capital, may wish to remain as
Shareholders to maintain their exposure to the Company and Etinde but the
Board is not making any recommendation to this (or any other) effect.

 

Yours faithfully

 

 

Jack Arnoff

Chairman

 

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