Andalas Energy issues loan note

Andalas Energy and Power Plc, an Indonesian focused energy company traded in the London AIM, said it has issued a 500,000 pounds zero coupon loan note which will strengthen the company?s working capital position while it continues to progress its strategy.

Andalas said in a statement on Wednesday the loan note, which has been issued to Sandabel Capital L.P., is secured against the assets of the company and has a par value of 500,000 pounds and is repayable in cash on or before April 28, 2017. No interest is payable over the term of the loan note, which has been issued at a 20 percent discount to par value. The cash proceeds received from the lender following the issue of the loan note are therefore 400,000 pounds.

The company said in the event that the loan note is not repaid by the maturity date, the loan note holder has the right to convert into equity at the lower of the prior days closing bid price or a 20 percent discount to the 10 day VWAP in minimum tranches of 20,000 pounds. For every three conversion shares issued under a conversion notice the lender will receive one 18 month warrant with exercise price at a 100 percent premium to the conversion price.

Dave Whitby, CEO of Andalas, said: ?Inclusion of our first project in Indonesia?s national energy plan would be a key value trigger event for Andalas, particularly in the eyes of industry participants and/or potential finance partners who understand the substantial underlying value in our project. Ahead of this, today?s loan note strengthens our working capital position, without the issue of equity, during an important period for the company. In the short term, we expect the first project approval to add considerable value to Andalas and the loan note provides an excellent means to fund the company?s further development to this point.?

The securing of the non-dilutive loan note for the company was facilitated by Beaufort Securities Limited, which has been appointed joint broker to the company. In conjunction with their appointment Beaufort has been granted three tranches of warrants at various premiums to the current share price.

Andalas Energy and power is a London AIM traded energy company focused on power generation and exploration and production activities in Indonesia.

Editing by Reiner Simanjuntak