Solimar Energy Limited
TSX VENTURE : SXS
ASX : SGY

Solimar Energy Limited

November 04, 2013 18:23 ET

Solimar Energy Limited: Proposed Consolidation of Shares

MELBOURNE, AUSTRALIA--(Marketwired - Nov. 4, 2013) - Solimar Energy Limited ("Solimar" or "the Company") (TSX VENTURE:SXS)(ASX:SGY) is proposing to consolidate the number of Shares it has on issue through the conversion of every 25 Shares into one Share ("Consolidation").

The Company is holding its Annual General Meeting on 29 November 2013 at 10:30am (AEDT) in Melbourne, Australia and has included a resolution at the meeting asking shareholders to approve the Consolidation. In order for the Company to effect the Consolidation a majority of shareholders voting will need to approve it. If the Consolidation is approved by shareholders it will take effect from 16 December 2013 in accordance with a timetable which will be announced to the ASX and TSXV closer to that date.

The current number of Shares outstanding is 509,240,359 and under the proposed Consolidation this number would be reduced to approximately 20.4 million. The Consolidation will not result in any unpaid amounts and where a fractional entitlement occurs the Company will round that fraction up to the nearest whole Share.

The Company currently has 51,100,000 unlisted options ("options") and 109,678,651 unlisted warrants ("warrants") on issue. The proposed Consolidation would see these reduced to 2,044,000 options and 4,387,147 warrants with a corresponding increase in their respective exercise prices.

The Company also has convertible debentures on issue and under the proposed Consolidation the price at which they convert to Shares would be adjusted to reflect the Consolidation.

A more detailed explanation of the impact the proposed Consolidation would have on the options, warrants and convertible debentures can be found in the Explanatory Memorandum of the Notice of Annual General Meeting.

The Board have decided to seek shareholder approval for the consolidation as under the rules of the TSXV a company listed on the TSXV is not able to issue shares at a price below C$0.05 per share (unless approved by the TSXV). As the current market price of the Shares is below C$0.05, the TSXV rules effectively restrict the Company from issuing new Shares. The Consolidation, by reducing the number of Shares and thereby increasing the imputed value of each Share, is expected to allow the Company to issue new shares so that the issue complies with the TSXV rules. The Consolidation is further expected to make an investment in the Company's securities more attractive to institutional and other investors and to position the Company for long term growth.

There are no plans to change the name of the Company.

The Consolidation is subject to the approval of the TSXV. No assurance can be given that the Consolidation will be approved by the TSXV on the terms proposed or at all.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Reader Advisory: Forward-looking statements

This news release contains forward-looking information relating to the Company's proposed consolidation of its capital and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.

Forward-looking information is based on certain factors and assumptions. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with the instability of the economic environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.

ABN 42 112 256 649

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