Oil and gas exploration company Modiin Energy LP (TASE:MDIN.L) seeking to raise NIS 75.5 million in a secondary issue of 270 million participation units at NIS 0.28 per unit, a 17% discount on today's opening price, and the same number of warrants. The company is offering 135,000 blocs, each comprising 2,000 participation units and 2,000 warrants in two series. If all the warrants are exercised, the company will raise NIS 112.5 million. Bids can be placed between 4 pm and 5 pm today.
The company is offering two series of warrants (135 million warrants in each series: the Series 11 warrants will be exercisable on September 30, 2013 at NIS 0.60 per participation unit; and the Series 12 warrants will be exercisable on January 30, 2013 at NIS 0.30 per participation unit
Modiin Energy, controlled by Tzahi Sultan and IDB Development Corp. Ltd., controlled by Nochi Dankner, is suffering from the dry holes at the Myra and Sarah wells, and is struggling to finance the drilling of the Gabriella well. The company has lost 90% of its market cap, which peaked at over NIS 1 billion, since the dry holes.
Net proceeds from the offering will be used to finance the Gabriella well.
The 392-square kilometer offshore Gabriella license is located 10 kilometers northwest of Tel Aviv, in water ranging from 100 meters to 425 meters. Modiin Energy owns 70% of the license, and Canadian companies Adira Energy Corporation (TSXV: ADL; Bulletin Board: ADENF; XETRA: AORLB8), and Brownstone Energy Inc. (TSX: BWN; Bulletin Board: BWSOF) subsidiary Brownbarb (Israel) Ltd., each own 15%.
Modiin Energy's participation unit price fell 21.2% by early afternoon to NIS 0.268, giving a market cap of NIS 60 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 27, 2012
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