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Sefton Resources (SER)

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Monday 03 August, 2015

Sefton Resources

Trading Statement

RNS Number : 8653U
Sefton Resources Inc
03 August 2015
 



3 August 2015

Sefton Resources, Inc.

("Sefton" or the "Company")

Company Update

Sefton Resources provides the following update in relation to its corporate activities.

Kansas Assets

Further to the announcement on 30 June 2015 that the Company had reached a provisional agreement with a third party to sell all of the assets and liabilities of Sefton's two wholly owned subsidiaries: TEG MidContinent Inc. and TEG Transmission LLC (the "Kansas Assets"), the proposed buyer no longer wishes to proceed on the previously agreed terms.  The new terms proposed by the interested party, influenced by the recent fall in oil prices, are not deemed to be in the best interest of Sefton's shareholders, so as a result, the provisional agreement with that particular party has been terminated.

As a result of the termination of the previously announced provisional agreement, Sefton plans to appoint a consultant to assist with the previously stated strategy to divest of these assets.  The Company hopes to conclude an agreement which is acceptable to shareholders in the near future. 

Update on Development Agreement

The Company continues to make good progress with regards to the potential acquisition of a portfolio of assets in Indonesia identified as part of the Development Agreement announced on 25 June 2015 (defined terms as per that announcement).  The Company continues to work closely with experienced industry executive Rob Shepherd, and a highly experienced team of Technical Advisors who have extensive experience in Indonesia on the Due Diligence process associated with those assets.  Following the identification of this portfolio of assets, the Due Diligence process was expedited with the signing of the Development Agreement on 25 June 2015. This process is ongoing and progressing in line with Management's expectations.  In addition, a shortlist of other separate future deals has been identified and screening of these deals is ongoing. Whilst no timeframe can be given for the completion of this process, the Board emphasises the importance of conducting a thorough process to ensure the assets can provide the potential to underpin the future growth of the Company and can be acquired on a fair valuation. 

Under the terms of the Development Agreement, the Company made an advance payment under commercial terms of £500,000 (the "Payment Advance") to UTAS to allow the JV to progress the due diligence and possible funding arrangements for the potential transactions.  These monies are being spent most prudently and the conservation of cash remains a key priority for the Company.  The Company and Mr Shepherd are wholly focussed on achieving a successful outcome with regards to the Development Agreement however subject to the findings of the ongoing Due Diligence process, there can be no guarantees that the acquisition of the identified assets will be completed on terms that are suitable to the Company.  In the event the Development Agreement is terminated, any unspent funds made under the Payment Advance will be repaid to the Company.

Assuming a successful outcome to the Development Agreement and other conditions associated with conclusion of the Ellerton Claim, Mr Shepherd intends to join the Company as Chief Executive Officer together with a number of additional highly-qualified Non-Executive directors who have been identified.

Update on Litigation

Further to the update on Litigation on 25 July 2015 regarding the Ellerton Claim in the United States District Court for the District of Colorado and the Ellerton Bankruptcy Petition in the United States Bankruptcy Court for the District of Colorado, the Company announces that it will be asserting counterclaims this week against Mr. Ellerton and his affiliates in the District Court.  The Board is wholly confident that it has a strong case against Mr, Ellerton, and will be aggressively pursuing these claims on behalf of Sefton's shareholders.  The Court will be holding an initial Scheduling Conference on 31 August 2015.  Sefton's position is that Mr. Ellerton's claims are automatically stayed given his filing of the Bankruptcy Petition, and that he may not pursue them at this time.  Further, Sefton believes that its own claims are not stayed under the provisions of the Bankruptcy Code, and that Sefton may prosecute them at this time.     

In any event, the Company has moved to dismiss the Bankruptcy Petition, and maintains that the Petition was filed in bad faith.  The Company is confident that it will be successful in this regard, and is seeking to recover its attorneys' fees, costs, and compensatory or punitive damages.  The Company will provide an update to shareholders once the Courts have clarified the situation.

Raylene Whitford, CFO, commented:

"The past couple of months has been a challenging period for Sefton and its shareholders.  Whilst we continue to make significant progress with regards to the Development Agreement and remain confident that it represents the potential future of the Company, we are well aware that a number of near term challenges remain which need to be resolved in order to move forwards.  We are fully focussed on concluding the Ellerton Claim with a satisfactory outcome, divesting the Kansas Assets on terms that are acceptable to our shareholders and improving the all-round reputation of the Company.  We believe our shareholders deserve to be rewarded for their patience and emphasise that the Board is doing all it can to stabilise the Company and move forwards with clarity and confidence."  

 

Visit www.seftonresources.com or contact:

Raylene Whitford, Chief Financial Officer

Tel: 0207 872 5570

 

Nick Harriss, Nick Athanas, Allenby Capital Limited (Nomad)

Tel: 0203 328 5656

Nick Bealer, Cornhill Capital (Broker)

Tel: 0207 710 9612

Ben Romney, Buchanan (PR)

Tel: 020 7466 5132

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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