Bahamas Petroleum Company (BPC) yesterday announced that its Bahamian-domiciled mutual fund investment vehicle began receiving initial subscriptions yesterday, with BPC issuing up to 100 million ordinary shares at two pence per share to the fund.
The initial subscription period for the fund, which was incorporated and licensed as a professional fund, will end on February 7.
BPC has also agreed to cover up to $50,000 in the initial setup costs of the fund for its first year as an “expression of support” of the fund’s objective to give Bahamian investors an interest in the planned upcoming exploration well.
“It has long been the company’s intention to provide Bahamians a means of investing directly in this nationally significant project. Whilst the royalty regime under which BPC operates ensures economic value for the people of The Bahamas via government revenues, the mutual fund initiative will allow Bahamian individuals to hold a stake in the outcome of this exciting and potentially transformational project and thus to personally benefit should the project be successful,” BPC’s Chief Executive Officer Simon Potter said in a release yesterday.
BPC announced in November that it had engaged Bahamian investment services and fund management firm Leno Corporate Services to act as its advisor for the creation of the fund.
The proceeds from the initial subscription will be used to purchase ordinary shares in BPC.
“Thereafter, subscriptions and redemptions will be processed on a monthly basis, or more frequently if felt appropriate by the fund, whereby any additional proceeds raised by net subscriptions will be used to purchase ordinary shares in Bahamas Petroleum Company, either directly in the form of new shares issued by the company (should it agree to do so) or existing issued shares on the AIM market of the London Stock Exchange,” BPC said in the press release.
The 100 million shares are being offered at the same price offered to existing shareholders in the company.
“If the fund were to be issued this number of shares in full, gross proceeds to the company would be the equivalent of £2 million (received in Bahamian dollars), and the fund would hold approximately 4.47 percent of the enlarged issued share capital of BPC following issuance of these new shares,” BPC explained.
“To the extent that the initial subscription proceeds of the fund exceed this predefined amount, the fund may either request to acquire additional new shares directly from the company (should the company agree to issue such shares), or the fund may seek to purchase existing shares openly on AIM, making the required market disclosure in either scenario.”
BPC clarified that although the fund has been initially licensed as a professional fund, it intends to have it reclassified for broader participation.
“The fund has initially been licensed as a ‘professional’ fund, such that qualifying professional/institutional investors will be able to subscribe for shares in the fund. However, Leno intends to make application to the Securities Commission of The Bahamas (SCB) for reclassification of the fund as a ‘standard’ fund, which would allow participation in the fund by non-professional retail investors in The Bahamas, should such approval be granted,” the release noted.
“The SCB will arrive at a decision on this application in due course and BPC will provide further updates on this process when appropriate.”