Panax to raise US$1.6M through rights issue

By Harry Roy Gunawan

Australian-listed Panax Geothermal Limited (Panax) said that it had planned a pro-rata renounceable rights issue to raise up to $1.6 million, of which $1.1 million is underwritten by the rights issue lead manager Patersons Securities Limited (Patersons).

The company said in a press statement over the weekend that proceeds of the offer would be used for the on-going development of Panax?s geothermal projects in Indonesia, including legal and associated costs of finalizing power purchase agreements, site infrastructure, environmental studies, transmission line route analysis and general working capital purposes.

Panax recently announced to ASX that it had been informed by PT PLN that the state utility company and the Indonesian Ministries of Finance, and Energy and Mineral Resources had confirmed that all negotiations relating to the terms and conditions of the Power Purchase Agreements (PPAs) for both Sokoria and Dairi Prima Projects were now final, with the final execution copies of these agreements now being reviewed and prepared. Based on the written advice received, execution of these agreements is expected to occur shortly.

Following receipt of that advice, and with the continuing progress that it is making on finalizing the PPA for the Ngebel Project, it considers that now is an appropriate time for the company to raise a smaller amount of equity capital, to provide it with sufficient working capital to enable it to finalize all of the PPA related negotiations and to continue to seek finalization of the project financing discussions.

?We continue to explore and advance a number of project financing opportunities with both Australian based and international parties to provide sufficient financing capability for our Indonesian portfolio. We are confident of finalizing these opportunities to a successful conclusion,? the company said in its press statement.

Editing by Benget Besalicto Tnb.